Govt urged to delay FSAI

Govt urged to delay FSAI

The Jakarta Post, Jakarta

The Indonesian Public Companies Association (AEI) is urging the
government to postpone for at least a year the establishment of
the Financial Services Authority Institution (FSAI) while
additional preparations are completed.

The government plans to introduce the FSAI in 2004. This
powerful institution would take over from Bank Indonesia the
supervision of banks, as well as the tasks of the Capital Market
Supervisory Agency (Bapepam).

Apart from that, the institution would also supervise other
service-based financial businesses, such as insurance, pension
funds and securities.

But AEI said in a press release on Wednesday more time was
needed to make more complete preparations, adding that hasty
preparation would create various technical problems in the
future, such as a lack of qualified personnel and effective
coordination.

"Not to mention the funding problems. It's hard enough for the
industry nowadays without having to allocate a sum of money to
finance the supervision," the release said.

Under a draft law currently being prepared by the government
as the legal basis for the FSAI, the funding for the association
would not come from the state budget but from the industry.

The impetus to set up the FSAI came amid increasing challenges
facing the financial services industry in the fast-changing
global economy.