Widodo to Submit Financial Safety Net Bill to House
22 June 2015 17:46 WIB
TEMPO.CO, Jakarta - The government and financial regulators and authorities are drafting the Law on Financial System Safety Net (JPSK bill).
Bank Indonesia Governor Agus DW Martowardojo said once the draft is ready, it will be submitted by President Joko Widodo to the House of Representatives (DPR).
The law is prepared to protect Indonesia from possible crises in the financial sector.
Earlier, chairman of the National Commercial Banks Association (Perbanas) Sigit Pramono said he hopes that the JPSK bill will soon be included in the list of items to be discussed by the national legislation program (prolegnas) team this year.
He proposes for the bill to have clarity on who will have the authority to handle crisis and what authorities will those parties have.
"There must be criteria [of what] can be saved; whether it should include Systematically Important Banks (SIB) and the risk of transmission. There is a procedure on how to determinate the protocols for handling crises, as well as procedures for handling banks or financial institutions that triggered the crisis," Sigit said.
He also said that the bill must have a clear explanation on who will be mandated for bailout duties; whether it is Bank Indonesia, the Deposit Insurance Corporation (LPS), or the government.
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