Juridical Implication of Otoritas Jasa Keuangan Authority in Banking Supervision in Indonesia

Abstract

The law number 21 of 2011 on Otoritas Jasa Keuangan is the beginning of a new system implication on regulating and supervising the financial services sector in Indonesia. Initially, Indonesia implemented a model of supervision by several institutions to be an integrated supervision by single institution, i.e., Otoritas Jasa Keuangan. The application of Law of Otoritas Jasa Kauangan divides the authority of banking supervision into two ways, i.e., microprudential which is the authority of Otoritas Jasa Keuangan and macrprudential which is the authority of Bank Indonesia. The law does not give clear limits on the scope of the divisions, whereas both microprudetial and macroprudential are closely related. This division of authority may complicate Bank Indonesia to to carry out its duties as a central bank, therefore it need a synergy between Otoritas Jasa Keuangan and Bank Indonesia in Banking Supervision. This research aims at giving prescriptions on synergy model between Otoritas Jasa Keuangan and Bank Indonesia that can meet the principle of justice, legal certainty and expediency. The method used is normative juridical research by examining various laws and regulations and other literature studies. This research shows the needs of synchronization between the Law of Otoritas Jasa Keuangan and other related laws to omit overlaps of authority between Otoritas Jasa Keuangan and Bank Indonesia.