JAKARTA - Center of Reform on Economics (CORE) Research Director Piter Abdullah said the formation of a financial services sector supervisory institution is crucial to be formed immediately. According to him, reforms in this sector have been going on for a long time, but efforts need to be made to reform regulations so that they remain relevant to the current situation.
"Especially in a pandemic situation like now, there is a need for amendments to regulations in the financial sector, such as in Bank Indonesia, OJK and LPS," he said in a webinar organized by Infobank, Tuesday, March 30.
Piter added that this supervisory institution could be a bridge that fills the void between fiscal policies issued by the government and monetary policies set by the central bank.
"Like BI, I think there is a need for a supervisory agency to monitor developments as well as prevent greater government intervention," he said.
For example, the supervisory agency referred to by Piter is reviewing policies set by Bank Indonesia.
"For example, if BI has set a reference interest rate, this institution can examine and provide input on whether it is in accordance with the conditions and needs. Well, if you haven't decided yet, then you can't direct BI policy, even asking questions, I don't think it's allowed for the sake of maintaining the independence of the central bank, "he explained.
Furthermore, Piter said that an institution like this actually existed within the central bank under the name Bank Indonesia Supervision Agency (BSBI). However, he encouraged the institutional strengthening of BSBI so as not to misplace policies and regulatory directions for the financial sector.
"This is what we have to encourage in order to establish a (supervisory agency) to also exist in the OJK and LPS," he said.
Even so, he acknowledged that various corrective measures in the financial services sector, particularly banking, have been able to keep the industry in a relatively stable condition.
"This good condition is actually our common asset to carry out a faster economic recovery," he added.
"We must carry out this financial reform in accordance with the milestones that have been set before, because the results have already been seen," he concluded.
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