- The government is currently conducting a study into the strengthening of the financial system framework in an effort to increase the effectiveness and reliability of the handling of any problems that affect financial system institutions and financial markets. The study has already resulted in five proposed strengthening measures.
- The first measure will involve the strengthening of financial-system databases and information integration between institutions, including cross-institution coordination that specifically addresses updating, harmonization and more rigorous forms of verification. The second measure will involve joint inspections and evaluations as a basis on which institutions can determine anticipatory steps aimed at the handling of any future problems that may emerge.
- Further measures will involve the strengthening of the various instruments which can be utilized by banks during the handling of any problems. Instruments currently being studied include short-term liquidity loans and sharia short-term liquidity loans, as well as strengthening the role of the Deposit Insurance Agency (Lembaga Penjamin Simpanan – “LPS”) in order to minimize risk by allowing the LPS to conduct early interventions, including fund participations.
- Finally, the government is also aiming to strengthen the overall decision-making processes of the Financial System Stability Committee (KSSK).
- For more on this story, see Hukumonline: “Pemerintah Susus 5 Penguatan Stabilitas Sistem Keuangan”.
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