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Central bank to pass derivative regulations of crisis mitigation law
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The logo of Bank Indonesia on the main gate of the central bank's headquarters in Jakarta. (Antara/File)
B
ank Indonesia is set to issue two new regulations this month on short-term liquidity credits as the derivative rules of the Financial System Crisis Prevention and Mitigation (PPKSK) Law passed last year.
The new rules would detail requirements for banks, both conventional and sharia ones, to be eligible to obtain short-term credits, Bank Indonesia deputy governor Perry Warjiyo said Thursday.
"We are finalizing the legal draft of the rules. Hopefully, Bank Indonesia's regulations can be launched in March," Perry said at the Asia Pacific Economic Cooperation (APEC) Financial Regulators Training Initiative regional seminar on crisis management held by the central bank.
(Read also: Banks demand clarity on bail-in scheme)
According to the new rules, the liquidity loans would be offered to conventional and sharia banks that were solvent only, Perry said.
Recommendation of the solvency would be provided by the Financial Services Authority (OJK), he added.
Passed in March 2016, the much awaited PPKSK Law serves as a legal foundation for policy makers to act at the time of financial crisis.
The law finds its relevance as Indonesia has coped with recurrent crises after the most severe one in 1998 and could face similar problems due to developments in the global economy. (bbn)
