JAKARTA – The Indonesian government plans to overhaul the financial regulatory framework in a move that will include the central bank taking on the additional tasks of managing economic growth and jobs, CNBC Indonesia reported on Wednesday, citing a minister.
The plan to put macro and micro supervision of the financial system under one command aimed to bridge the gap between the central bank authority, which issues macroprudential regulations for the banking sector, and the Financial Services Authority (OJK) , Airlangga Hartarto, coordinator of the Minister of Economic Affairs, said in an interview with CNBC Indonesia. (https://bit.ly/2EzIeBO)
The OJK is currently the “micro” regulator responsible for overseeing and regulating the entire financial sector.
Hartarto also said that the Bank of Indonesia (BI) will be responsible for maintaining the quality of economic growth and employment, in addition to its current mandate of managing the value of the rupee through the management of the inflation and exchange rate.
“These four functions need to be … examined by the central bank,” Hartarto said.
Susiwijono Moegiarso, secretary at the Ministry of Economic Affairs, declined to comment on the CNBC report. Hartarto did not immediately respond to a request for comment.
Reuters reported in July that President Joko Widodo was planning to issue an emergency decree to return banking regulation, currently under OJK’s oversight, to the central bank’s mandate, sources said. One of the sources said BI would be tasked with tackling unemployment.
BI Governor Perry Warjiyo has repeatedly said that the central bank’s
current policy goal is to support economic recovery, having cut interest rates four times this year in response to the pandemic of coronavirus and bought a large amount of securities. the state.
The OJK relaxed the rules for restructuring loans and issued several incentives to maintain the stability of the financial system. REUTERS