"The draft Financial System Safety Net (JPSK) law must be immediately approved so the country can be well-prepared for potential crises," Boediono said.
Jakarta (ANTARA News) - Vice President Boediono has stated that the government needs a strong legal umbrella in order to effectively deal with economic crises in the future.

"The draft Financial System Safety Net (JPSK) law must be immediately approved so the country can be well-prepared for potential crises," he said during the opening of a seminar on Indonesian Deposit Insurance Corporation (LPS) here on Wednesday.

With the JPSK law in place, Boediono added, the country would have a strong legal umbrella under which it would be easier for administrative officials to make decisions in response to an economic crisis.

"If the legal foundation is not strong, everyone will be wary of taking action and it will have negative consequences," he pointed out.

Boediono said the JPSK law was part of the government`s efforts to develop a protocol to ensure that remedial measures could be implemented efficiently and effectively at times of national crisis.

"A crisis response must be synchronized and unified. That is our experience from dealing with crises in the past," he added.

"The LPS is like a fortresses of defence during times of crisis because it guarantees the security of public funds in banks and, thereby, the public`s trust in the economy," the vice president stated.

"The global economy is still riddled with uncertainties, so the government must remain ready to face any eventuality," Boediono pointed out.

He said the government must pay extra attention to the financial sector, which was one of the most vulnerable sectors during economic crises.

"The financial sector is usually slow in responding to a crisis," Boediono noted.

Sharing the vice president`s view, economic observer Fauzi Ichsan said a strong legal foundation was crucial to deal with an economic crisis such as the one in 2008.

"The JPSK law is needed very much by the government in case it has to bail out a bank like in the case of Century Bank back then. Unless there is a law in place to support such steps, no one would dare make a decision to bail out a bank again for the fear of being accused of corruption in the future," he added.

The government and the House of Representatives have not yet concluded discussions on the draft JPSK law, despite having used two DPS sessions.

Financial minister Agus Martowardojo expressed hope that the draft law would be passed by the end of the third quarter this year.(*)

Editor: Heru Purwanto
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