Page 4 - Perpustakaan Lemhannas RI

LAMPIRAN 3

Financial Sector Assessment Program (FSAP) Result by IMF and
World Bank

Financial System Stability Assessment
Financial Sector Assessment Program (FSAP) missions to Jakarta during October
6-16, 2009 and February 24-March 10, 2010. The main findings are:

Executive Summary
1. A decisive and successful response, as well as a decade of sound policies

and structural reform, helped Indonesia recover quickly from the 2008
global crisis
2. The banking system is generally healthy
3. Banking supervision and regulation have improved substantially, but gaps
remain in dealing with problem banks and crisis management.
4. Indonesia is planning a major change in the regulatory architecture by
creating an integrated supervisory agency.

FSAP assessments are designed to assess the stability o f the financial system as a whole and not
that o f individual institutions. They have been developed to help countries identify and remedy
weaknesses in their financial sector structure, thereby enhancing their resilience to macroeconomic
shocks and cross-border contagion. FSAP assessments do not cover risks that are specific to
individual institutions such as asset quality,operational or legal risks, or fraud.

Banking supervision has improved substantially since the Asian crisis but
there are gaps. Bank Indonesia (Bl) has established supervisory frameworks and
methodologies that generally meet international norms. However, it falls short in
dealing with problem banks. Legally mandated prompt corrective action (PCA) would
speed up Bl’s actions to resolve weak banks, and make decisions more transparent.
Issues with the quality of capital, loan provisioning rules, and home-host supervision
also need to be addressed.

FSAP Recommendations

Banking Issues
1. Issue revised regulation to strengthen the quality of capital by bringing risk

weights to at least Basel I levels and tightening the accounting definition of Tier 1
capital.
2. Issue revised regulations to strengthen the regulatory definition of exposure,
including related-party exposure.
3. Issue revised regulation to strengthen asset classification and provisioning
norms, including treatment of restructured loans.
4. Issue regulations and supervise interest rate risk on banks' banking book.