International Exchange Bank (iBank) executive vice president Antonio Moncupa said the BSP move was "a pre-emptive step to protect not only the system but the entire economy."
"A bank director must understand the risk and must have the competence in managing public money," Moncupa said. "Poor financial management would result in weakening the economy."
He added that banks are imbued with public character requiring strict and high levels of standards.
The BSP move will not only increase the credibility of the banking system but will change the overall paradigm in appointing and hiring personnel to the highest positions of a financial institution.
Bankers said stricter fit and proper rule would help to further professionalize the banking industry. "It could weed-out any political accommodations."
Prior to the new ruling, directors of banks had political appointees, whom most believe have no experience working in a bank.
Earlier, BSP Deputy Governor Alberto V. Reyes said regulators are reviewing the existing fit and proper regulations by piercing through the experience, education, competence as well as training of a person being nominated as director and/or officer of a bank.
Regulators must impose the highest standards on the qualifications of bank directors and officers in order to protect the general banking public, Reyes was quoted to have said. – TPT