Indonesia is to have a new watchdog in 2013 to oversee financial institutions including commercial banks, after lawmakers approved its creation on Thursday.
The independent regulator, to be known as the Financial Services Authority (OJK), will take over from the central bank and capital watchdog Bappepam-LK in supervising banks, brokerages and insurance companies.
“This is one of the strategic and fundamental steps in the efforts to improve the quality of national economic development,” Finance Minister Agus Martowardojo told parliament.
The 1997-1998 Asian financial crisis saw many Indonesian banks collapse and Indonesia had to borrow heavily from the International Monetary Fund to boost its finances as investors sold their currencies.
Southeast Asia’s largest economy grew by close to 6.5 percent from a year earlier in both the first and second quarters this year after expanding 6.1 percent in 2010.