The term “Financial Stability” took on a specific context as a result of the GFC. It is now specifically understood to mean as addressing the build up of systemic risks which in turn is defined as disruptions to the financial system that can adversely affect the real economy. Macroprudential policy is the means for mitigating these systemic risks.
The Financial Stability Coordination Council (FSCC), led by the BSP, made publicly available the country’s Macroprudential Policy Strategy Framework. This document reflects the Council’s thinking, the institutional arrangements as well as the tools that will be used to sustain and enhance the health of the financial system. This health is specifically defined in terms of the system’s resilience against “systemic risks.” It also highlights the collaborative nature inherent to the FSCC.