Supervision of Banking Institutions in Achieve Sound Banking in Indonesia

Abstract

The transfer of Bank Indonesia's authority of banking institutions supervision to the Financial Services Authority (FSA) carried out due to the financial reform during the crisis well in 1997/1998 and 2008 is limited to short-term desire to be able to survive so that some doubt to eliminate the impact of the crisis in all sectors Financial particularly banks at the time. Hybrid product development and the emergence of a business conglomerate banking and financial institutions in Indonesia into sociological factors needed an independent agency engaged in microprudensial and regardless of microprudential held by the Indonesian Central Bank. Legally emergence FSA Act number 21 Year 2011 is the mandate of article 34 Act  no. 23 of 1999 concerning Bank Indonesia as amended by Act No. 3 of 2004, which indirectly weaken the independence of Bank Indonesia. This causes the need for an integrated regulation replaces regulation in the field of supervision of financial institutions, especially for banks. Construction of  the development model regulation and supervision of banking institutions in Indonesia is formed through comparison with control models in other countries, analyzing the typology of banking institutions in Indonesia that are highly regulated, perform mapping regulatory rules regarding banking supervision by taking into account the implications of the theoretical and practical implications in accordance with the principles of good corporate governance.

Keywords : Supervision, Bank, Microprudential