Sunday, 19 September 2021

Bank Indonesia sustained financial system stability with swift and extraordinary national economic recovery programme

Singapore, 29th July 2021 – Bank Indonesia was recognised as Best Systemic and Prudential Regulator in Asia Pacific in 2021 under The Asian Banker Regulation and Supervision Awards at The Asian Banker Leadership Achievement Award Virtual Ceremony 2021.

 

Bank Indonesia (BI) has shown success in implementing its policy-mix during the COVID-19 crisis

Bank Indonesia (BI) has shown success in implementing its policy-mix, encompassing accommodative and well-targeted macroprudential policies to maintain financial system stability and mitigate adverse economic fallout due to the COVID-19 pandemic. Moody’s affirmed the Indonesian banking system with a stable outlook with expectations that economic upturn and relative containment of the pandemic will improve banks' operating environment and profitability as credit costs and provisions decrease.

 

BI’s macroprudential policies has effectively managed procyclicality to sustain financial system stability, backed by a resilient banking sector

In 2020, BI  reduced the policy rate by 125 basis points from 5% to 3.75% and implemented large-scale quantitative easing of around IDR 740.7 trillion ($74 billion) or 4.8% of GDP. BI’s macroprudential policies has effectively managed procyclicality to sustain financial system stability, backed by resilient banking sector. As of December 2020, the banking sector capital adequacy ratio (CAR) stood far above the regulatory minimum of 8% at 23.81%, dominated by high-quality Tier-1 capital of 93%, and supported by relatively sound profitability with return on asset (ROA) at 1.59%.

 

BI has significantly contributed to the national economic recovery programme (PEN) by implementing swift, sizeable, bold and extraordinary policy measures

BI has significantly contributed to the national economic recovery programme (PEN) by implementing swift, sizeable,and bold  policy measures, mainly the the provision of extraordinary liquidity backstops and burden sharing mechanism. Banking sector liquidity remained ample as a result of large-scale quantitative easing with liquidity coverage ratio at 267.9% and liquid assets to third-party funds ratio at 31.67%.

 

 

About Regulation and Supervision Awards

The Asian Banker Regulation and Supervision Awards is a programme designed to determine and award the best practices and outstanding achievements of the top regulators in the Asia Pacific, Middle East and Africa regions. The Asian Banker evaluates regulators according to three basic functions of regulatory oversight that they may perform - macroeconomic regulation, systemic and prudential regulation and conduct of business oversight and their effectiveness in fulfilling these roles. We have developed our scorecards to capture the essence of the role of regulators, their effectiveness and the benchmarks they need to achieve. The evaluation process is rigorous and transparent, and constantly improved to incorporate the latest challenges and industry changes. For specific details relating to description of the awards, evaluation criteria and process, kindly visit https://www.asianbankerawards.com/regulation&supervision/

About The Asian Banker

The Asian Banker is the region’s most authoritative provider of strategic business intelligence to the financial services community. The global researchcompany has offices in Singapore, Malaysia, Manila, Hong Kong, Beijing, and Dubai, as well as representatives in London, New York, and San Francisco. It has a business model that revolves around three core business lines: publications, research services and forums. The company’s website is www.theasianbanker.com

For further information, please contact:

Olive Sun

Marketing Executive

osun@theasianbanker.com

Tel:  +86 10 5869 4642

Diary of Activities
Finance Thailand 2021
19 October 2021