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Jakarta Post

Financial sector overhaul

  • Editorial board

    Jakarta

Jakarta   /   Mon, September 21 2020   /  07:24 am
Bank Indonesia (BI) continues to look for the right formula to deal with growing uncertainty in the financial sector. (Shutterstock/File)

The fragmentary statements made by the government over the past three weeks on plans to reform the financial sector could cause confusion in an industry already mired in high uncertainty. In late August, the Finance Ministry announced that the government was planning a general reform of the financial system through a regulation in lieu of law (Perppu) covering mainly three institutions: Bank Indonesia, the Financial Services Authority (0JK) and the Deposit Insurance Corporation (LPS). Then, in early September, the government and the House of Representatives suddenly announced an agreement to deliberate a bill to amend the 1999 Bank Indonesia Law. The House-initiated bill would, among other things, move the OJK’s banking supervision powers back to BI so that the central bank would once again be in charge of all banking industry supervision. It would also expand BI’s mand...