Jakarta, CNBC Indonesia – The Legislation Body (Baleg) DPR RI is currently drafting a revision of Law Number 23 of 1999 concerning Bank Indonesia (BI). In the draft, the bank’s supervisory function will return to BI, not the Financial Services Authority (OJK) as it is today.
If the law is passed the consequence is that OJK will continue to supervise other non-bank financial institutions. This was conveyed by the deputy chairman of the DPR RI Baleg, Ahmad Baidhowi.
“Yes, among others, the OJK oversees the financial sector outside of banking and this is just a draft proposal. It still needs to be deepened,” said Baidhowi to CNBC Indonesia, Monday (31/8/2020).
The Baleg Expert Team estimates that the return of banking supervision authority to BI must be carried out no later than December 31, 2023. Responding to this news, OJK expert staff, Ryan Kiryanto, also spoke up.
“Related to Perppu [Peraturan Pemerintah Pengganti UU], is it a Perppu concerning BI-LPS, and so on. We view that it is the political domain. So we don’t enter the realm there, we enter our zone, which is the integrated surveillance zone, “said Ryan, in an online press statement entitled Financial System Stability and Integrated OJK Supervision, Wednesday (2/9/2020).
In the future, this means that BI as a central bank is not only preoccupied with macroprudential policies, but also at the microprudential level of individual banks.
Changes or shifts in the supervision function of financial institutions have actually occurred in many countries. There has been a shift in the design or architecture of financial system supervision that occurred from before the 2008 global financial crisis to post-crisis conditions.
Indonesia is one example. Through the mandate of Law Number 21 of 2011, OJK was formed. OJK is an independent body established and has the task and authority to regulate, supervise, examine and investigate all financial institutions, both banks and other financial institutions.
Referring to the article published by Calvo et al from the Bank for International Settlements (BIS) entitled Financial Stability Insights on Policy Implementation No.8, this OJK is a supervisor of financial institutions that follows an integrated model (integrated).
In this publication, Calvo et al. Mentioned that there are three models of financial institution supervision that are still being practiced in the world today. Some are sectoral, integrated and partially integrated.
For those of a sectoral nature, the supervisory institutions for financial institutions are generally divided into three, one that oversees banking, insurance and the capital market. Until now, the sectoral model is still the most widely adopted in the world.
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Sumber : Calvo, et.al.(2018).”Financial supervisory architecture: what has changed after the crisis?”. FSI Insights on Policy Implementation No 8, Bank for International Settlement.- – |
Of the 82 jurisdictions surveyed by the BIS, 40 countries have implemented this model. Some of them are Brazil, India, Hong Kong, Thailand, the Philippines, Vietnam, Spain, Portugal and South Africa.
Then there are also adhering to the integrated model. In this model, it is broken down into two, one of which is supervised by the central bank, such as those found in Russia and Singapore. This model was implemented in 9 of the 82 countries surveyed.
However, there are also those whose supervision is done by a separate supervisory body or separate supervisory agency (SSA) which is widely used in countries such as Germany, Switzerland, Japan, Korea and Indonesia with its OJK. This model was implemented in 9 of the 82 countries surveyed.
 Sumber : Calvo, et.al.(2018).”Financial supervisory architecture: what has changed after the crisis?”. FSI Insights on Policy Implementation No 8, Bank for International Settlement.-– |
For the last model, namely partially integrated also divided into two groups. The first group namely twin peaks and the second group followed the model two agency.
In the first group, there are two institutions tasked with overseeing prudence (prudential) from financial institutions while other institutions supervise conduct from financial institutions. This model is adopted by 8 of the 82 countries surveyed including Australia, New Zealand, Canada and the United Kingdom.
 Sumber : Calvo, et.al.(2018).”Financial supervisory architecture: what has changed after the crisis?”. FSI Insights on Policy Implementation No 8, Bank for International Settlement.-– |
The last model, namely two agency. The model used in 9 countries including Malaysia, Saudi Arabia, Italy and France uses two institutions. One institution oversees banks and insurance, while the other oversees the capital market.
 Sumber : Calvo, et.al.(2018).”Financial supervisory architecture: what has changed after the crisis?”. FSI Insights on Policy Implementation No 8, Bank for International Settlement.-– |
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