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OJK to trial major banks' leverage levels
The Financial Services Authority (OJK) is set to carry out a trial at major banks to assess their leverage ratios
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The Financial Services Authority (OJK) is set to carry out a trial at major banks to assess their leverage ratios.
The trial will be implemented on a quarterly basis, starting from the first quarter of 2015, on BUKU III and IV lenders and foreign-owned banks, including foreign branches, according to an OJK document. These lenders are allowed to carry out business activities overseas, provided that they obtain approval from the financial regulator.
The minimum leverage ratio is set at 3 percent and full implementation of the ratio requirement is scheduled to take place on Jan. 1, 2018. A leverage ratio is a tool required under the Basel III agreement, which is a set of global standards for the banking industry, to determine the depth of a lender's leverage compared with its various risks.
Bank Mandiri president director Budi Gunadi Sadikin said his bank's leverage ratio was already higher than the requirement, standing at 12 percent.
Meanwhile, Bank Rakyat Indonesia (BRI) finance director Achmad Baiquni said the bank had carried out the necessary measures to shield itself from risks and that its ratio was now over 10 percent.
Echoing Baiquni, OCBC NISP president director Parwati Surjaudaja said the BUKU III lender was equipped with internal measures. 'We are ready to undergo the trial and our ratio has reached 12 percent,' she said.
