PENGAWASAN_OTORITAS JASA KEUANGAN

Summary

In this video, the speaker discusses the importance of the Financial Services Authority (OJK) in supervising Indonesia's financial sector. OJK was established to address the fragmented supervision system that existed before its formation. The discussion covers OJK's responsibilities in overseeing banks, capital markets, and insurance industries to ensure fairness, transparency, and consumer protection. Key issues such as financial literacy, illegal loans, and cyber security challenges are also explored. The speaker highlights the growing complexity of financial supervision and the crucial role OJK plays in maintaining stability, especially in the face of technological innovations in digital banking and fintech.

Takeaways

• 😀 OJK (Financial Services Authority) was formed due to the need for an independent and integrated financial supervision system in Indonesia, addressing the fragmentation that existed before its establishment.
• 😀 Before OJK, banking was supervised by Bank Indonesia, capital markets by BPEPAM LK, and insurance by the Ministry of Finance, creating structural weaknesses and gaps in supervision.
• 😀 The 2008 global financial crisis served as a wake-up call for Indonesia, highlighting the potential impact of inadequate supervision, as seen in the failures of major institutions like Lehman Brothers and AIG.
• 😀 Indonesia experienced significant losses in the Jiwas Raya and Asabri cases, caused by poor investment practices and weak cross-sectoral supervision, emphasizing the need for integrated financial oversight.
• 😀 OJK was established through Law Number 21 of 2011 with the mission to ensure fair, transparent, and accountable financial practices while protecting consumer interests.
• 😀 OJK aims to improve financial literacy among all generations in Indonesia, addressing the low level of awareness regarding banking and investment products, which often leads to fraudulent schemes targeting the public.
• 😀 OJK's duties, as outlined in Article 6 of Law Number 21 of 2011, cover banking, capital markets, and the non-bank financial industry, including monitoring both financial institutions and their products.
• 😀 OJK is strict in supervising online loans, especially illegal ones that often exploit vulnerable populations such as students and the lower middle class, making their role in supervision crucial.
• 😀 OJK conducts microprudential supervision, focusing on the health of individual banks by monitoring key metrics like the Capital Adequacy Ratio (CAR) to prevent financial risks and potential crises.
• 😀 OJK also monitors interactions between financial sectors, such as banks, insurance companies, and capital markets, since disruptions in one sector can lead to contagion risks that affect other sectors and the broader financial system.
• 😀 Future challenges for OJK include managing cyber security risks in an increasingly digital financial sector, regulating rapidly growing fintech platforms, and ensuring that digital banking innovations remain within the bounds of consumer protection.

Q & A

Why was the Financial Services Authority (OJK) established in Indonesia?

OJK was established due to the urgent need for an independent and integrated financial sector supervisory institution. Prior to its formation, supervision of the financial sector in Indonesia was fragmented, leading to overlapping authority and supervision gaps, which contributed to inefficiencies and risks.

What were some of the structural weaknesses in the Indonesian financial sector before OJK?

Before OJK, supervision was fragmented with various agencies overseeing different sectors, like Bank Indonesia for banks and BPEPAM LK for the capital market. This fragmentation led to overlapping authority, gaps in supervision, slow coordination between financial institutions, and the potential for financial institutions or products to escape oversight.

How did the 2008 global financial crisis impact Indonesia’s financial oversight?

The 2008 global financial crisis highlighted the failure of financial supervision, particularly in the U.S. housing sector. This served as a wake-up call for Indonesia, emphasizing the importance of comprehensive supervision to prevent risks from spreading across sectors, which led to the formation of OJK.

What role does OJK play in protecting consumers in the financial sector?

OJK's role is to ensure the fair, transparent, and accountable operation of financial services, including banking, capital markets, and insurance. It also helps protect consumers by intervening in fraudulent or deceptive financial products and resolving related disputes.

What is the current challenge related to financial literacy in Indonesia?

A major challenge is the low level of financial literacy among the Indonesian public. Many people, including students and lower-income individuals, are unaware of the risks associated with investment and financial products, which has led to incidents like illegal loans and fraudulent schemes.

What are the primary duties of OJK as outlined in Law Number 21 of 2011?

OJK's duties include supervising banking, capital markets, and the non-bank financial industry. This involves monitoring both the financial institutions and their products to ensure compliance with regulations and to prevent illegal or harmful practices.

How does OJK monitor the health of individual banks?

OJK conducts microprudential supervision, which focuses on monitoring the financial health of individual banks. This includes assessing capital adequacy, risk management, and ensuring that operations comply with regulations. A key indicator for this is the Capital Adequacy Ratio (CAR).

What is the significance of the Capital Adequacy Ratio (CAR) in banking supervision?

The Capital Adequacy Ratio (CAR) is crucial because it determines whether a bank has enough capital to cover its risks. If a bank's CAR falls below the minimum required level, it could face solvency issues, risking its ability to meet customer demands and potentially causing a collapse.

How does OJK prevent risks from spreading across different financial sectors?

OJK performs integrated supervision, which monitors not only individual institutions but also how different sectors (like banking, insurance, and capital markets) interact. For instance, if a bank's investment in stocks affects its solvency, OJK can intervene early to prevent a ripple effect across other sectors.

What are some of the future challenges OJK will face in the digital age?

In the future, OJK will face challenges related to cybersecurity, digital banking innovations, and regulating fintech platforms. With the rise of online loans and digital services, OJK will need to ensure consumer protection, prevent illegal activities, and ensure that these innovations do not harm the stability of the financial system.