Govt Stresses Financial Safety Net Urgency

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  • TEMPO.CO, Jakarta – The government has officially included the Financial Safety Net System bill (RUU JPSK) on July 3, following the repeal of government regulation in lieu of the law (Perppu) no.4/2008.

    During the House of Representatives' (DPR) plenary hearing on Tuesday, July 7, the Perppu repeal was ratified. Therefore, the government and the legislator can start to discuss the RUU JPSK on August 14, or when the DPR's fifth plenary hearing period begins.

    Finance Minister Bambang Brodjonegoro said the existence of a legal umbrella that regulates the safety net of Indonesia's financial system is urgent, given the current turbulence in the global economy. These external factors, he said, pose risks that can interfere with the national financial stability.

    "The most important thing in dealing with financial turmoil is having a strong legal basis," he said.

    Refering to the Century bailout case, Bambang said that the RUU JPSK does not give impunity to the Financial Stability System Committee (KSSK), albeit serving as a stronger legal platform.

    The KSSK, Bambang said, will be led by four financial authorities: the Finance Ministry, The Financial Services Authority (OJK), Bank Indonesia (BI), and the Indonesia Deposit Insurance Corporation (LPS).

    Isa Rachmatarwata, the Finance Ministry's expert staff on the financial service and capital market policies and regulations, said that the main point of the RUU JPSK is special liquidity loan programs for systemically important domestic banks. Bailouts will be differentiated from short-term liquidity loans (PLJP), since BI can disburse PLJPs to banks without taking into account the bank's category. In other words, the RUU PSJK will also strengthen BI's role as a lender of the resort.