THE PHILIPPINE Deposit Insurance Corp. (PDIC) wants to introduce a risk-based assessment system to prevent banks from taking on too much leverage following the increase in the maximum deposit insurance coverage (MDIC).
“Presently, we only have one premium assessment, the flat rate assessment system, that applies to all banks, which is one-fifth of 1% of the total deposit liabilities of each bank. With the introduction of the risk-based assessment system, we’ll have to take into account the levels of risk that the banks are undertaking in determining what should be the appropriate assessment rate that will be levied on the banks,” PDIC President and Chief Executive Officer Roberto B. Tan said at a briefing on Friday.
“Basically, the idea is to discourage the banks from engaging into excessive risk-taking practices.”
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