'Supervisory body to boost BI's accountability'<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Minister of Finance Boediono stressed on Monday the importance of
\nsetting up a supervisory board for Bank Indonesia's board of
\ngovernors in a bid to strike a balance between the central bank's
\nindependence and its accountability.<\/p>\n
The existence of such a board was to accommodate criticism
\nfrom other parties, so in a way this would also strengthen the
\ncentral bank, Boediono said.<\/p>\n
\"It's not intended to weaken BI; the establishment of the
\nboard is meant to strengthen it, so it can be a buffer whenever
\ncriticism is directed toward the central bank,\" he said on the
\nsidelines of seminar on the economy here, adding that the board
\nwould not interfere with BI monetary policies.<\/p>\n
The supervisory board in question was the one that had been
\nproposed by the ministry to be included in the amendments to the
\ncurrent Bank Indonesia law.<\/p>\n
The central bank has opposed this proposal, causing further
\ndelays in the amendment of Law No. 23\/1999 on Bank Indonesia.<\/p>\n
Under the government's proposal, the supervisory board would
\nfocus on setting up a control mechanism to supervise and monitor
\nthe performance of the BI board of governors, meaning that it
\nwould deal with their accountability.<\/p>\n
The proposal aims to improve the accountability of the board
\nof governors, which, under the existing law, is almost
\nuntouchable. Members of the board may be replaced for only one
\nof three reasons: resignation, incapacity or expiration of
\ntenure.<\/p>\n
However, despite fierce opposition from the central bank,
\nBoediono was upbeat that the matter would soon be resolved.<\/p>\n
\"There are still, indeed, differences over the supervisory
\nbody, but I expect an understanding can soon be achieved,\" he
\nsaid.<\/p>\n
Another unresolved issue, according to Boediono, was the
\nplanned establishment of a financial services authority.<\/p>\n
Such an institution would take over the role of Bank Indonesia
\nin supervising the banking sector -- something that many have
\nviewed as the underlying reason behind the central bank's
\nreluctance to accept the concept.<\/p>\n
Bank Indonesia has requested the plan be postponed by at least
\n5 years.<\/p>\n
Apart from supervising the banking sector, the institution
\nwould also oversee other service-based financial industries such
\nas insurance, pension funds, securities and other institutions or
\ncorporations managing public funds.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/supervisory-body-to-boost-bis-accountability-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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