All Praise to God Almighty for His bounty and blessings that the Financial
Services Authority (OJK) has begun to operate since early 2013. The
establishment of OJK extends broader horizons for the Financial Services
Industry by uniting the regulation and supervision of the Capital Market
and Non-Bank Financial Industry (previously under the Capital Market and
Financial Institution Supervisory Agency, Ministry of Finance) along with the
Banking Industry (from Bank Indonesia) under a single authority.
The OJK has
a great responsibility towards the economy of Indonesia because of the two
overarching mandates, namely the integrated regulation and supervision
of all activity in the financial services sector, as well as Education and
Consumer Protection. We are also grateful that amidst global economic conditions shrouded in
ubiquitous uncertainty that undermined the domestic economy, OJK is still
able to implement its function and duties effectively.
Similarly, the transfer of
the supervision and regulation function for the capital market and non-bank
financial industry on 31st December 2012, along with banking supervision and
regulation on 31st December 2013, was completed without triggering shocks
on financial markets in Indonesia.
During the past year of 2013, global financial markets continued to fluctuate.
Early signs of recovery in first part of 2013 was further negated by the sharp
correction in the financial markets in the second half of 2013, particularly in
emerging economies, due to the Federal Reserves tapering policy and the debt
ceiling in the US, coupled with inconclusive crisis handling and resolution in
Europe. Such economic and financial market conditions strongly influenced the
domestic economy and financial market performance.
Consequently, during
the year of 2013 macroeconomic development was highlighted by the slowing
down of domestic growth, a depreciation of domestic currency as well as the
increase in the domestic cost of capital (financing). Whilst at the end of 2013,
the IDX Composite index was at a level of 4,274.18, which was down 0.98%
on previous data. However, despite the aforementioned developments, the
domestic financial market still shows signs of its resiliency.
Departing from IDX
Composite trends, stock market capitalisation value increased 2.23% to
Rp 4,219 trillion. Congruent with the increasein stock market capitalisation value, the global economic slowdown did not compromise the performance of the investment fund industry, as evidenced by the 2.64% bump in total Net
Asset Value (NAV) to Rp 192.54 trillion. Meanwhile, the non-bank financial
industry, which encompasses the insurance industry, pension funds, finance
companies and other financial services institutions as well as the sharia non-
bank financial industry, tended to perform promisingly. Total assets of the
non-bank financing industry increased 13.6% to Rp 1,320.78 trillion at the end
of December 2013.
A remarkable year has passed and a lot has been achieved towards the
manifestation of the Vision and Mission of OJK. At the start of operations, OJK
focused attention on efforts to strengthen the implementation of the tasks,
function and authority for the regulation and risk-based supervision of financial
services activity in the capital market industry and the non-bank financial
industry.
On behalf of the Board of Commissioners, I would like to express my
deepest gratitude to all stakeholders who have supported task implementation
at OJK. Sincere appreciation is also extended to all employees of OJK, who have
worked tirelessly and with dedication to realise the vision and mission of OJK.
Muliaman D. Hadad,
Chairman of the
Board of Commissioners
Indonesia Financial Services Authority
