An opinion piece published by BusinessWorld draws parallels between past financial crises and the Bangko Sentral ng Pilipinas’ (BSP) handling of the Iran conflict, arguing that temporary regulatory relief may sow the seeds of future instability. The article notes how each major crisis reshaped central banking—from the Asian Financial Crisis altering exchange-rate management to the Global Financial Crisis elevating financial stability as a core objective.
During the COVID-19 pandemic, central banks expanded their supervisory toolkit with extraordinary liquidity support and regulatory flexibility. The author contends that the BSP’s response to the Iran conflict follows a similar pattern, where measures intended to shield the financial system from exogenous shocks may inadvertently encourage risk-taking or weaken oversight over time.
The piece concludes by urging regulators to distinguish between prudent relief and excessive forbearance, warning that without clear exit strategies, temporary measures can become permanent vulnerabilities. It calls for a careful balancing act between supporting economic stability during geopolitical turmoil and maintaining the discipline needed to prevent long-term financial risks.