Skip to main content

Indonesia's financial regulations are slated for a significant revision. Here's how it may appear

After two years of failed attempts and market resistance, Indonesia is poised to approve substantial reforms to its financial sector legislation as early as this week.

Indonesia's financial regulations are slated for a significant revision. Here's how it may appear

The new bill aims to broaden the central bank's mandate and bolster its authority to purchase government assets in times of crisis, as it has done for the past three years to bolster Southeast Asia's largest economy. By the end of 2022, the central bank will have purchased 1.144 quadrillion rupiah ($73 billion) in debt instruments. In addition, the measure tries to align legislation with the fast growing fields of financial technology and cryptocurrency.

The plan is scheduled to be put to a vote this week, after the finance panel approved it on December 8. Here's what you should know about the reform of the banking sector:

Why is Indonesia revising its financial legislation?

Existing regulations are convoluted and frequently inconsistent or overlapping. Given the current development in fintech and the central bank's aspirations for a digital rupiah, they are also obsolete.

The government anticipates that the measures will assist strengthen the local capital markets in order to finance the needs of the economy.

It is also consistent with President Joko Widodo's goal of changing legislation to reduce bureaucracy and simplify procedures, particularly so that financial authorities can respond to crises more quickly.

What alterations are ahead for the central bank?

.net/YwotbKdP4sVunJGfdhmgww/e8f260a6-84bf-4222-a093-e1ef14e44c00/

If passed, the bill will give Bank Indonesia the ability to purchase government bonds when the president declares a crisis, legitimizing its unusual action during the pandemic, which the central bank and the finance ministry had previously described as a "one-time" measure.

As part of the plan, MPs want the central bank to "participate in maintaining financial system stability in order to foster sustainable economic growth" in addition to its current mandates of ensuring rupiah and price stability.

An earlier effort to expressly incorporate job creation and economic growth in Bank Indonesia's mandate, which analysts say poses a threat to the institution's independence, has been removed from the most recent measure.

Comments

Popular posts from this blog

Unlocking the Secrets of the World of Finance

  In today's fast-paced global economy, understanding the intricacies of finance is paramount for both individuals and businesses alike. Finance serves as the lifeblood of any economic system, fueling growth and prosperity. Our team at AIPRM Corp is dedicated to providing you with comprehensive insights into the world of finance. In this article, we delve deep into the financial landscape, unraveling its various components and complexities. Navigating the Financial Landscape Finance: A Holistic Perspective Finance encompasses a wide array of financial instruments and institutions, each playing a unique role in the broader financial system. At its core, finance involves the management of money, investments, and assets. Our comprehensive exploration of finance will leave you well-informed, whether you're a seasoned investor or a newcomer to the world of finance. Financial Markets and Instruments The world of finance thrives within a complex web of financial markets and instrument...

In other words, what does it mean when someone says that something is a "double top"?

When an asset reaches a high price twice in a row with a small price decrease in between, a double top, a highly unfavorable technical reversal pattern, occurs. It is common for the financial markets to see two peaks at once. When the asset's price drops below the low point between the two prior highs, this pattern is verified. The Meaning of a Double Top. The formation of a double top may indicate a shift in an asset class's medium- to long-term trend. Above is a chart depicting the double top pattern that formed in shares of Amazon.com, Inc. (AMZN) between September 2018 and October 2018 at a price of $2,050. In this case, the amount of backing that grew to roughly $1,880 was really significant.  The double top was not verified until the price of the stock dropped below $1,880, even though it had fallen by about 8% from its October high. After that, the share price fell progressively, eventually settling at a level nearly 31% lower than its previous high. Using Netflix Inc. (...

60 billion pound financing package for English authorities

Michael Gove, the Secretary of State for Levelling Up, has today (19 December 2022) agreed a nearly £60 billion package for councils in England for the next fiscal year, ensuring that councils can continue to provide essential frontline services. The settlement means councils throughout England will receive an additional £5 billion, a 9% increase over last year's settlement, as the government continues to support councils and public services despite mounting financial pressures. The agreement for the following year contains a one-time Funding Guarantee that ensures every council in England will get at least a 3% increase in core spending power before any local decisions are made regarding council tax. Alongside this, the government confirmed today a new £100 million scheme for councils to safeguard the most vulnerable households from council tax hikes, fulfilling the campaign pledge to protect local taxpayers from excessive increases. Social care is also a priority, with the govern...