ID :
24968
Fri, 10/17/2008 - 01:06
Auther :
Shortlink :
https://www.oananews.org//node/24968
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GOVT ISSUES REGULATION ON FINANCIAL SECTOR SAFETY NET
Jakarta, Oct 16 (ANTARA) - The government on Thursday issued a regulation in lieu of law on the financial sector safety net (JPSK).
Finance Minister Sri Mulyani Indrawati said the regulation is the mandate of Law No.3/2004 on Bank Indonesia which allows the government to take a decision in the event of difficult financial conditions that has a systematic impact and to anticipate the threat of global financial crisis that may endanger the stability of the financial system and national economy.
"The government regulation is a supplement to the two government regulations issued earlier. This does not mean that a crisis has happened. If we work together there won't be crisis," she said in a joint press conference with Bank Indonesia Governor Boediono and State Enterprises Minister Sofyan Djalil.
JPSK is a mechanism of protecting the financial system against the threat of crisis covering the prevention and handling of crisis.
In general, JPSK is meant to create and preserve the stability of financial system by controlling financial institutions and payment systems, providing short-term payment facilities, and preventing and handling a crisis.
The government regulation consisting of nine chapters and 31 articles only covers measures to prevent and handle a crisis. The regulation began to take effect on October 15, 2008.
The measures to prevent and hadle a crisis cover efforts to handle the liquidity difficulties and/or solvability problems of banks and non-bank financial institutions that have a systematic impact.
The instruments to be employed will be adjusted to the need and the level of threat to the financial system. The instruments cover emergency payment facilities and additional capital through provisional capital participation.
In case a bank receives emergency payment facilities, Bank Indonesia is authorized to take over the right and authority to hold a shareholders' meeting to replace its board of directors and put it under special surveillance status.
Meanwhile, if a bank receives provisional capital participation, it will be fully taken over by the deposit insurance corporation (LPS) or a government-sanctioned special body.
In addition, to reduce the cost of crisis to be borne by the country, the government can also provide incentives or facilities to solve liquidity difficulties and/or solvability problems faced by the private sector.
The incentives and facilities cover the provision of fiscal incentives and the easing of legislation.
The funds needed to prevent and handle such a crisis will be taken from the state budget through the issuance of state bonds or other means.
Finance Minister Sri Mulyani Indrawati said the regulation is the mandate of Law No.3/2004 on Bank Indonesia which allows the government to take a decision in the event of difficult financial conditions that has a systematic impact and to anticipate the threat of global financial crisis that may endanger the stability of the financial system and national economy.
"The government regulation is a supplement to the two government regulations issued earlier. This does not mean that a crisis has happened. If we work together there won't be crisis," she said in a joint press conference with Bank Indonesia Governor Boediono and State Enterprises Minister Sofyan Djalil.
JPSK is a mechanism of protecting the financial system against the threat of crisis covering the prevention and handling of crisis.
In general, JPSK is meant to create and preserve the stability of financial system by controlling financial institutions and payment systems, providing short-term payment facilities, and preventing and handling a crisis.
The government regulation consisting of nine chapters and 31 articles only covers measures to prevent and handle a crisis. The regulation began to take effect on October 15, 2008.
The measures to prevent and hadle a crisis cover efforts to handle the liquidity difficulties and/or solvability problems of banks and non-bank financial institutions that have a systematic impact.
The instruments to be employed will be adjusted to the need and the level of threat to the financial system. The instruments cover emergency payment facilities and additional capital through provisional capital participation.
In case a bank receives emergency payment facilities, Bank Indonesia is authorized to take over the right and authority to hold a shareholders' meeting to replace its board of directors and put it under special surveillance status.
Meanwhile, if a bank receives provisional capital participation, it will be fully taken over by the deposit insurance corporation (LPS) or a government-sanctioned special body.
In addition, to reduce the cost of crisis to be borne by the country, the government can also provide incentives or facilities to solve liquidity difficulties and/or solvability problems faced by the private sector.
The incentives and facilities cover the provision of fiscal incentives and the easing of legislation.
The funds needed to prevent and handle such a crisis will be taken from the state budget through the issuance of state bonds or other means.
