Friday, June 19, 2009

Be a Good Regulator

PDIC, BSP, and various banking associations recently inked a memo of agreement for the launch of the “Be a Wise Saver” program, which aims to improve depositor awareness in light of the recent string of bank failures.

According to PDIC President Jose Nograles, the campaign has something to do with the recent closure of the controversial Legacy banks. He said the Legacy issue started because depositors believed in something that is “too good to be true,” a scenario that PDIC hopes to avoid in the near future.“We learned from the Legacy mess. We have to make sure now that the depositors are well-informed. They have to know who they’re dealing with,” he said.

What!!! that is like advising people not to buy generic drugs because they are made by Filipino and Indian companies, don’t be fooled into buying these low-cost drugs because you are not sure of its quality. Buy the branded drugs: even though much more expensive, at least you are sure of its efficacy.

Don’t deposit in the rural banks, especially those that give high interest rates because they are not well-capitalized and are prone to fail. Deposit in the big commercial banks though they give very low interest rates: at least you are sure they won’t go under.

Question: Drugs are regulated by the BFAD; do you mean that even though these generic drugs are approved and monitored by the BFAD, they could be adulterated or even detrimental to one’s health?

Question: Rural banks are regulated by the BSP and the PDIC; do you mean that even though these banks are supervised and monitored by the BSP and PDIC; are you telling me that they are conducting unsafe and unsound banking practices?

Answer: Helloooo! This is the Philippines. Regulators here don’t do nothing, until it is too late.

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