Seminar by Communication Forum for Director of Banking Compliance Opened by OJK`s Chief Executive for Banking Supervision

Feb 16 2015


Financial Services Authority, Jakarta, February 16, 2015: Chief Executive for Banking Supervision of Financial Services Authority (OJK) Nelson Tampubolon opened a seminar arranged by Communication Forum for Director or Banking Compliance themed Implementation of Integrated Governance and Risk Management for Financial Conglomeration in Jakarta on Monday (Feb. 16, 2015).

Nelson in his speech said that the declining global commodity prices, decelerating economic growth in trading-partner countries, political turmoil, and deceleration in domestic economy have really colored banking business atmosphere in 2014. However, banking industry managed to pass through well, despite deceleration occurred.

In the context of future challenges, some matters will influence banking industry development and growth. Globalization process and rapid development in financial sector, supported by the ever growing information technology, have created financial system that is highly complex, dynamic, and interconnected between one financial subsector and another.

Therefore, in order to face the challenges, linkage between financial services institution in various sector is something inevitable. In Indonesia`s banking industry, financial conglomeration also has a significant role. Of totally 118 banks, OJK has mapped 16 banks that have created financial business groups. If they are all consolidated, they dominate around 60 percent of total financial asset nationally.

Although financial business groups get benefits from consolidation, conglomeration and internationalization of their activities, the conglomeration process on the other side increases existing risks and creates new risks, both against financial business groups and against financial system in general.

Considering the dynamics and risks of the mushrooming financial conglomeration, OJK as the authority to regulate and supervise banking sector is certainly demanded to reorganize and arrange an integrated supervision system over the whole activities in financial sector as mandated in Law No. 21 of 2011.

In correlation with the matter, OJK has recently issued OJK Regulation Number 17/POJK.03/2014 on implementation of integrated risk management for financial conglomeration, and OJK Regulation Number 18/POJK.03/2014 on implementation of integrated governance for financial conglomeration.  I hope that the event held today can provide comprehension for all of us regarding the importance to always be prepared to face various challenges, including in the context of preparing ourselves to implement the framework of integrated supervision development that OJK has been doing, he concluded.

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