"We have agreed and signed a memorandum of understanding on how we will conduct coordination to safeguard the financial system`s stability," remarked the Deputy Minister of Finance, Mahendra Siregar, after the MOU was signed.
The signing of the MOU on the new structure of the Financial System Stability Coordination Forum (FKSSK) was also attended by Finance Minister Agus Martowardojo; Bank Indonesia`s governor, Darmin Nasution; Bank Indonesia`s deputy governor, Halim Alamsyah; and the director general of debt management, Rahmat Waluyanto.
Mahendra observed that the new FKSSK structure would not only improve coordination among the three institutions in terms of the exchange of the latest data and information but also help the institutions discuss the crisis indicators of the management protocol.
"We are trying to harmonise the policies of the three institutions concerned and (improve their) coordination in producing a policy," he remarked.
He added that under the new framework, FKSSK would monitor not only the banking sector but also the financial market, capital market and non-banking financial institutions.
Meanwhile, the acting head of fiscal policy of the Ministry of Finance, Bambang Brodjonegoro, stated that the ministry was making efforts to increase the indicators in the crisis management protocol because the current financial system is becoming increasingly sophisticated and complicated.
"We hope that with a more complete and comprehensive protocol, responsibility will not only be put on one institution but also have implications on the forum, so that crisis handling can be done comprehensively," he remarked.
According to Bambang, the understanding would boost coordination in the handling of problems in case an indicator in the crisis management protocol presents a problem.
"Although there is only one yellow indicator of crisis, while the others are green, it must be considered in terms of its impact on other indicators. We do not want the other indicators to become yellow," he noted.
He said that with better coordination, the three institutions can alert each other and take preventive measures in case the indicator signs change.
"By meeting with each other we can alert each other, so that Bank Indonesia, the Finance Ministry and LPS can take preventive measures and will not be taken by surprise in case the indicator signs change," he added.
Based on these plans, the forum will be further strengthened with members from the Financial Service Authority (OJK) after it is established early in 2013.
Bank Indonesia`s governor, Darmin Nasution, said that the new MOU was signed to meet the mandate of the law on OJK and to improve the crisis management protocol.
"The law on OJK mandates a coordination forum and the signing of the MOU, which was done just now, with regard to the law as well as to improve the protocol to ensure a smooth mechanism," he explained.
He stated that in the near future, the FKSSK would carry out a simulation for preventing the crisis that can affect the financial system at any time.
"We will conduct a simulation in the near future to test its effectiveness," he pointed out.
(SYS/KR-BSR/A014)
Editor: Suryanto
Copyright © ANTARA 2012
