T

he House of Representatives has asked the government to name the President as the highest decision-maker and person-in-charge of the Financial System Stability Committee (KSSK), which will have the authority to declare the economy is heading into a crisis.

The KSSK is part of the Financial System Stability Net (JPSK) bill, which is currently being deliberated by the government and the House.

The chairman of House Commission XI overseeing banking and finance, Fadel Muhammad, said on Monday that the need to name the President as the top decision-maker had become clear after a provision on legal immunity for the KSSK was removed in the face of public protest.

'€œIf it'€™s the President who makes the final decision, the responsibility should not be shouldered by individuals,'€ he said after a meeting with the government and Commission XI. During the meeting, the commission submitted a problem inventory list (DIM) to the government as part of a proposed revision to the draft bill.

Fadel said that the President should be the one to decide whether a situation was a crisis or a given bank needed a bail-out.

The JPSK bill, proposed as a government initiative, is a highly anticipated bill designed to provide legal certainty for policymakers during periods of economic volatility that may pose a threat to domestic financial stability.

According to the bill, the KSSK, comprising the Finance Ministry, Bank Indonesia (BI), the Financial Services Authority (OJK) and the Deposit Insurance Corporation (LPS), will have the authority to decide if an economic situation is heading toward a crisis, thus allowing the committee to take the necessary steps to address the situation.

The draft also stated that the finance minister would act as a coordinator and member of the KSSK.

The House, however, proposed in its DIM that the minister should act on behalf of the President, arguing that the highest responsibility should be held by the latter because institutions under the KSSK had varying levels of authority.

Mukhamad Misbakhun, a Commission XI member and Golkar Party politician, said after the meeting that the President, as the commander-in-chief, had the ability to order state institutions to take all measures required to prevent crisis.

'€œThe President simply needs to receive an unanimous recommendation from the KSSK before hitting the button,'€ he said, adding that similar systems were in place in Japan and the UK.

In response to the House'€™s proposal, Finance Minister Bambang Brodjonegoro said only that the government would discuss it further.

'€œWe need to think about the person-in-charge because the decision will involve the state budget,'€ he said.

The government and lawmakers agreed to continue discussion of the bill at another meeting that took place on Monday evening.

Bambang said that the bill would be discussed in nine '€œclusters'€ instead of provision-by-provision to ensure the alignment of the talks with the draft'€™s big picture. The clusters include the bill'€™s focus on banking, systemic effect criteria, legal protection for the KSSK and dealing with liquidity and solvability problems.

Both Fadel and Bambang expressed hope that the bill could be made into law before the House ended this year'€™s assembly period on Dec. 18.
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