Designing an Integrated Financial Supervision Agency: Selected Lessons and Challenges for Indonesia

Abstract

Having initiated reforms in the financial sector in late 1997, the government of Indonesia also introduced a new Central Bank Independence Act in early 1999. The next task for the government is to devise a safety net system for the financial sector, which includes the possibility of establishing an integrated financial sector supervisory agency. This study draws essential lessons from the experiences of other countries to highlight a number of key challenges facing Indonesia in designing its integrated financial sector supervisory agency, especially at the early stages.