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Financial Institutions to better managing risks requires development of credit data management that is more
reliable, comprehensive, and integrated with diverse products and services of Credit Information that is
updated and has added value sourced from Financial Institutions and Non-inancial Institutions.
Therefore, in 2013 BI will realize an industry that manages credit information, to be conducted by BI
and Credit Information Management Agency LPIP in an ecosystem of National Credit Information System
SIPNAS. The existence of LPIP as a private credit bureau is expected to become a inancial system
infrastructure that can provide credit information products that has value added services and reaches
datainformation from data sources beyond inancial industry as what has been conducted by BIK through
SID.
The availability of synergy of credit information management between BI and LPIP is expected to
create a credit information management that is reliable, comprehensive, and integrated to support the
needs of Financial Institutions, and also Non-inancial Institutions. In the end, the existence of SIPNAS is
expected to boost the creation of inancial system stability as well as to support the eforts to enhance
the growth of national economy.
K. MACROPRUDENTIAL POLICY
Global financial crisis provide a valuable lesson learned on the importance to maintain the financial system in order to remain
resistant to crises. The crisis which currently is still ongoing was triggered by some failures of financial institutions led to a
systemic impact and a dysfunctional global financial market. Such situation impacted to the effort in bailing-out the
failed financial institutions, which then added burden to the taxpayers. Meanwhile, due to the crisis, financial markets were
dysfunction, failed to carry out their function as a transmission vehicle for monetary policy, financial transmission from
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surplus to deficit units, or as the vehicle to keep and develop assets to achieve prosperity wealth management. On the
regulation side, the policy framework was not directed to prevent the occurrence of systemic risks in the financial sector.
Resilience of the financial sector against crises among others are the result of efforts to: i maintain the soundness of financial
institutions; ii maintain the process of intermediation of credit and financing to support the sustainability and soundness
economy; and iii maintain the function of financial markets that able to manage and allocate funds efficiently. With the
stability of financial system, the stability of macro economy can be maintained as well. Efforts to maintain the financial system
resilient to turmoil and crisis requires a macroprudential policy. The macroprudential policy aims to maintain financial sector
resilience as a whole so as to be able to overcome systemic risks due to the failures of financial institutions or markets
resulting to crisis that inflicts losses to the economy. Macroprudential policy is required to bridge the gap between
the macroeconomy policy with regulations on financial markets and institutions which is microprudential in nature.
The difference between macroprudential and microprudential policy lies on its purpose, whereas macroprudential policy
aims to mitigate a systemic risk limit system-wide distress, microprudential is intended to create a sound financial
institution limit individual institutions’ distress. Hence, macroprudential policy emphasizes more to the attempts
to create the soundness of financial sector as a whole, while microprudential policy is intended to create a sound financial
institution, efficient and able to conduct good intermediation. Pursuant to Act of the Republic of Indonesia No. 21 Year 2011
concerning OJK, the scope of governance and supervision of microprudential covering: governance and supervision of
institutions; soundness; and prudential aspect of banks shall be OJK duties and authority. BI has been given the duty and
autority to govern and supervise macroprudential matters. In the context of macroprudential supervision, BI uses various
indicators to identify the sources of imbalance and vulnerability in the financial system that might lead to systemic risks. The
indicators cover, among others: indicator of macroeconomy or balance of financial institution and real sector; indicator of
vulnerability in external sector; indicator of pressure in financial
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market; and indicator of risk concentration and relationship inter-sector, including inter-financial institution in financial
sector or between financial sector and real sector. To mitigate systemic risks, BI applies series of regulations
which are macroprudential tools. The referred regulations are implemented with the objectives to, among others: control
liquidity of economy through a policy mix of minimum reserve requirement and loan-to-deposit ratio, limit the growth of
excessive non-productive credit through the application of loan to value ratio, and control short-term capital inflows in
order to reduce the affect of capital outflows reversal toward financial stability. In the future, BI will apply Basel III which
covers elements in governing macroprudential among others through: enforcement of leverage ratio; countercyclical
capital buffer; and liquidity coverage ratio see explanation concerning Basel III.
Given that macroprudential policy and monetary policy is interrelated, BI duties in implementing macroprudential
and monetary policies will help reducing the complexity of coordination required to guarantee implementation
effectiveness of the two policies. Monetary policy can minimize the arising of systemic risk, among others by giving incentives
to market players for taking risks. Whereas, macroprudential policy may influence macroeconomic condition, for instance
higher minimum capital requirement at the time of expansive economic might inhibit aggregate demand.
B AB 5
KEY BANKING REGULATIONS
