Featured Product

    OJK Assesses Impact of Silicon Valley Bank, Issues Other Updates

    March 28, 2023

    The Financial Services Authority of Indonesia (OJK) published an assessment of the impact of closure of Silicon Valley Bank on the banking industry, along with a regulation on products and activities of Sharia banks and Sharia business units. The regulation on products and activities of Sharia banks and Sharia business units ensures that banks should apply Sharia Principles, prudential principles, and customer protection principles while issuing new products and activities. The regulation, which sets out provisions on general requirements, risk management, product explanations, licensing, reporting, and discontinuation of new products and activities, shall come into force on the date of promulgation. Additionally, OJK is seeking comments, until April 17, 2023, on the maximum legal lending limits for rural banks (or BPRs) and the maximum limits for distribution of funds for Sharia rural banks (or BPRS).

    Following the Basel Committee on Banking Supervision (BCBS) meeting in Hong Kong, Dian Ediana Rae, Chief Executive of OJK Banking Supervision, highlighted that the impact of closure of Silicon Valley Bank and its spillover effects was minimal on the banking industry in Indonesia. Indonesian banks are expected to strengthen the implementation of governance, risk management, and prudential principles by conducting stress testing and monitoring of bank asset and liability portfolios, including the risk concentration on loans and funding. Furthermore, banks should maintain the capital adequacy ratio and the availability of liquidity in high-quality assets and must avoid speculative practices of excessive risk-taking behaviorIn addition, banks are regularly asked to conduct stress tests in various scenarios to test banking resilience. OJK will continue to conduct various collaborative and synergistic policy steps with Bank Indonesia, the Ministry of Finance, the Deposit Insurance Corporation, both directly and through the Financial System Stability Committee (KSSK)—to anticipate global impacts and pressures that may occur.

     

    Related Links (in Indonesian)

     

    Keywords: Asia Pacific, Indonesia, Banking, Lending, Operational Resilience, Stress Testing, Islamic Banking, Credit Risk, Basel, Rural Banks, Capital Adequacy Ratio, Liquidity Risk, ALM, OJK


    Featured Experts
    Related Articles
    News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News
    News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News
    News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    News

    Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks

    At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.

    September 14, 2023 WebPage Regulatory News
    News

    ISSB Standards Shine Spotlight on Comparability of ESG Disclosures

    The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures

    August 22, 2023 WebPage Regulatory News
    News

    EBA Issues Several Regulatory and Reporting Updates for Banks

    The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.

    August 10, 2023 WebPage Regulatory News
    News

    BCBS Proposes to Revise Core Principles for Banking Supervision

    The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.

    August 04, 2023 WebPage Regulatory News
    News

    US Proposes Final Basel Rules, Transition Period to Start in July 2025

    The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.

    August 04, 2023 WebPage Regulatory News
    News

    FSB Report Outlines Next Steps for Climate Risk Roadmap

    The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.

    August 04, 2023 WebPage Regulatory News
    News

    EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise

    The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.

    July 31, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8931