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NEW UPDATES Asean Affairs  18 August 2015  

Most important RI banks to be announced after new law

Most important RI banks to be announced after new law

The Financial Services Authority (OJK) says that it will only announce the names of the domestic systematically important banks (DSIBs) after the law on the financial system stability net (JPSK) is passed.

Speaking at a press conference on financial stability, OJK chairman Muliaman D. Hadad said that it was still holding talks with Bank Indonesia (BI) about which banks should be considered DSIBs.

“The number is not final yet, but we will make it public after the JPSK Law is passed because the DSIBs are part of that law,” he said on Thursday.

The DSIBs are banks whose financial woes could widely impact the economy due to their large size and the degree to which they are integrated into the whole financial system. These banks will be subject to tighter financial supervision and will be charged with higher capital requirements to help anticipate any possible financial problems.

Even though the DSIB list has not been finalized, the OJK has often said that it will be made up of both national banks and the Indonesian branch of several foreign banks.

“Major banks in the BUKU IV category will definitely be on the list,” Muliaman said, referring to the country’s top four banks: Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA) and Bank Negara Indonesia (BNI).

Deliberation on the JPSK Law will resume next week, when lawmakers at the House of Representatives begin their new sitting session.

The bill is expected to be passed into law this year, which will function as management protocol for officials in times of crisis. According to the bill, the DSIBs will be eligible for liquidity assistance provided by the Financial System Stability Committee (KSSK).

The committee itself consists of the OJK, BI, Finance Ministry and Deposit Insurance Corporation (LPS).

Mandiri president director Budi Gunadi Sadikin said the JPSK Law occupied higher priority than the DSIB list.

“At a time when the economy is volatile like now, having the JSPK Law would be very important. We certainly don’t expect bad things to happen, but we don’t know what will happen in the future,” he said.

BNI president director Achmad Baiquni said that it currently already had sufficient capital, even if an additional capital requirement was charged upon the bank as a DSIB.

By June, BNI’s capital ratio stood at 17.1 percent, much higher than the 8 percent requirement set at the moment. As a DSIB, a bank will have to provide an additional 2 percent of capital.

Meanwhile, during the press conference, Muliaman said that the financial regulator had conducted a stress test on the latest currency volatility to find out the impact on the banking industry.

He claimed that the banks still had strong enough capital to absorb shocks that might arise from the volatility, citing the 20.5 percent capital ratio published in the latest banking statistics.

“We can conduct another stress test at any time, but in reality, banks must always maintain prudent policies when it comes to lending management,” he said.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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