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Jakarta Post

Strengthening bank intermediation, resilience

  • Mohammad Nuryazidi
    Mohammad Nuryazidi

    Economist at the department of macroprudential policy, Bank Indonesia

Jakarta   /   Tue, February 27, 2018   /  01:23 pm
Strengthening bank intermediation, resilience A teller on a bank. Banking industry in Indonesia is undergoing a significant transformation driven by technology. (Shutterstock/File)

Bank Indonesia (BI) recently introduced a couple of macroprudential policy instruments in order to strengthen the banking intermediation function and its liquidity management. The central bank converted the loan-to-funding ratio (LFR) policy (for conventional commercial banks) and the financing-to-deposit ratio (FDR) policy (for sharia banks and sharia business units) into the macroprudential intermediation ratio (MIR). In addition, BI also introduced the macroprudential liquidity buffer (MLB) by converting the secondary reserve requirement for conventional commercial banks. Both instruments will be effective as of July 16 for conventional commercial banks and Oct. 1 for sharia banks. As the macroprudential policy still grows in its developing phase, the MIR and the MLB are unique Indonesian policies that also made BI a pioneer in macroprudential policy development in the world....

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.