Govt to speed up Bapepam merger
Rendi A. Witular, The Jakarta Post/Jakarta
The government will speed up the merger of the Capital Market Supervisory Agency (Bapepam) with the Directorate General of Financial Institutions by year's end in a bid to boost efficiency at the Ministry of Finance.
Finance minister Yusuf Anwar said the new watchdog resulting from the merger would still be called Bapepam, with the current Director General of Financial Institutions Darmin Nasution as its first chairman.
"The merger will be concluded within 100 days (of the new government's tenure), that is, by the end of this year or by next January," Yusuf said on Wednesday during a breaking of the fast gathering with capital market investors, brokers and analysts.
"We want the merger to be completed quickly in order to make the Ministry of Finance more efficient in its operation. We don't want to leave the business community in a condition of uncertainty," he said.
The merger of the two institutions aims to focus the Ministry of Finance on fiscal affairs and policy-making, and is part of a second reorganization drive at the ministry ahead of the establishment of the Financial Service Authority (OJK) set for 2010.
The OJK is designed to be a single agency to supervise all bank and non-bank financial institutions.
At present, the Bapepam oversees the capital market and the Directorate General of Financial Institutions supervises non-bank financial institutions, with both falling under the auspices of the finance ministry.
Yusuf said the new, merged Bapepam was expected to function as a temporary independent agency more or less like the future OJK, except for the task of supervising the banking sector, which is held by the central bank.
"If (the new Bapepam) carries out its tasks well, then we can hope to speed up the process of establishing the OJK by two or three years," said Yusuf.
According to the Central Bank Law, the powerful OJK is to be set up by 2010 at the latest to take over the central bank's supervisory role of the banking sector.
The OJK, which will also fall under the Ministry of Finance, will oversee all financial institutions such as banks, insurance firms, pension funds, securities houses and multifinance firms.
Yusuf said the OJK was widely anticipated by the international community, as several capital market programs developed by foreign donors had been left aground due to the absence of such an agency.
A team of officials from Bapepam and the Directorate General of Financial Institutions are now settling legal matters for the merger and the new institution's authorities, after which they will consult the State Minister of National Development Planning.
The team is also studying whether it would be possible for the new Bapepam to have as much as 11 subdivisions.
Elsewhere, Yusuf told capital market players and experts that the finance ministry would focus its efforts on creating economic efficiency by eliminating the high-cost economy and removing unnecessary regulations and bureaucratic procedures.