BI seeks support in fight against poverty<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia Governor Burhanuddin Abdullah met on Tuesday
\nwith leaders of the House of Representatives as part of lobbying
\nefforts to delay the establishment of the Financial Services
\nAuthority Institution (FSAI), which will take over the central
\nbank's banking supervisory role.<\/p>\n
He told reporters following the meeting that extensive study
\nand more preparations were needed to ensure that the FSAI would
\nbe beneficial and not create problems.<\/p>\n
\"We all agree that the FSAI is important, but there are
\n(currently) various hurdles in establishing it,\" said
\nBurhanuddin, who recently became the governor.<\/p>\n
The FSAI would not only assume the central bank's banking
\nsupervisory role, but would also take over the supervisory role
\nin other financial service-related industries such as the capital
\nmarket, insurance and pension funds.<\/p>\n
The importance to set up the FSAI came amid increasing
\nchallenges facing the financial services industry in the fast-
\nchanging global economy.<\/p>\n
The Ministry of Finance's directorate general of financial
\ninstitutions, which is in charge of designing and setting up the
\nFSAI, plans to submit a draft law on the institution to the House
\nlater this year with a forecast of the FSAI becoming fully
\noperational by 2006.<\/p>\n
But Burhanuddin, who was previously the central bank's main
\nnegotiator in talks with the finance ministry, has said that
\npreparations to set up an effective FSAI would need between five
\nand ten years.<\/p>\n
House leaders seem to be favoring Burhanuddin's position.<\/p>\n
Chairman of the House Commission IX on financial affairs Max
\nMoein said that the country's banking sector was not yet ready
\nfor the FSAI.<\/p>\n
He pointed out that the financing for the FSAI would have to
\ncome from the banking and finance industry while at the same time
\nmost banks were still in a difficult financial state.<\/p>\n
\"If the bill (on FSAI) is ready, we'd still need to wait until
\nthe banks have recovered (from the crisis) before we can set up
\nthe FSAI,\" Max said.<\/p>\n
He added that even in other developed nations, setting up such
\na key institution would need a long period to prepare the human
\nresources, organization and system.<\/p>\n
By transferring the central bank's supervisory role of local
\nbanks, Bank Indonesia's main focus would be on creating a stable
\nmacroeconomic condition, a mandate stipulated under the 1998
\ncentral bank law.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-seeks-support-in-fight-against-poverty-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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