Indonesia Crisis Prevention

On Apr. 5, Indonesia FSA issued rules for preventing financial crisis.

  • Follows Law No. 9 of 2016 on Prevention and Management of Financial System Crisis.
  • Provides elucidation and confirmation on application of policies on crisis management.
  • Regulations
  • Regulation on determination of status and follow-up supervision of commercial banks.
  • Constitutes how to manage issues faced by systemic banks or other types of banks.
  • Confirms that bank supervision consists of normal, intensive, and special supervision.
  • Includes activation of recovery plan implementation, Deposit Insurance Corporation's
    early entry into the management of bank solvency issues, and handover mechanism.
  • Bridge Banks
  • Procedures for setting up bridge banks - establishing, operating and liquidating them.
  • Offers another option in addressing a bank's solvency issues, besides transferring
    assets and/or liabilities, or debt to equity swap, or revocating failing bank's license.
  • The alternative is setting up a bridge bank to serve as a resolution facility for assets.
  • Systemic banks
  • Obligations to prepare for preventing and dealing with the possible financial problems.
  • Enable banks to start making efforts to solve their financial problems when operating.
  • Have to include requirement for controlling shareholder to increase the bank's capital.
  • With this rule, they are prompted to resort to bail-in to solve their financial problems.

Regulators Indonesia FSA
Entity Types Bank; SIFI
Reference PR, 4/5/2017
Functions Financial; Reporting; Resolution; Risk; Treasury
Countries Indonesia
Products Banking
Regions AP
Rule Type Final
Rule Date 4/5/2017
Effective Date 4/5/2017
Rule Id 31836
Linked to N/A
Report Issue 4/15/2017
Report Section International

Last substantive update on 04/11/2017