Reducing the dominance of the government and focusing on KSSK coordination

Oct 13, 2025 by windailys.com 109 views

Reformulation of Strengthening the Status of Independence of Financial Services Authority to Realize Financial System Stability

Introduction

The independence of the Financial Services Authority (OJK) is a crucial factor in realizing a healthy financial system. As an absolute and primary condition for OJK to play an important role in maintaining financial system stability, independence is essential for the institution to operate freely and effectively. However, the involvement of the government in OJK's affairs is still a topic of debate. This normative research aims to discuss the basis of the formation of OJK, the formulation of independence, and the reformulation of independence in realizing a strong and stable financial system.

The Formation of OJK

The formation of OJK is functionally contained in Article 33 paragraph (4) of the 1945 Constitution, which serves as the economic constitution of Indonesia. The emergence of integrated financial services products, information disparities, and asymmetrical information, as well as cases of economic crises, such as the Century Bank and Antaboga crises, have encouraged the acceleration of OJK's formation based on Article 34 of the BI Law in 2010-2011. The creation of OJK was a response to the need for a more effective and efficient financial regulatory body in Indonesia.

The Formulation of OJK's Independence

The formulation of OJK's independence includes the Minister of Finance, APBN, and levies from the financial services industry, which are adapted to the characteristics and needs of Indonesia. However, the placement of the Minister of Finance as Chairperson of the DK Pansel and the Decision of the Constitutional Court, which deleted the phrase "Free from interference from other parties," has raised questions about the return of OJK's independence. The formulation of independence is essential for OJK to operate freely and effectively, but the involvement of the government in OJK's affairs has created concerns about the institution's autonomy.

The Need for Reformulation

Reformulation is needed for the definition of independence in the OJK Law to make it more assertive and comprehensive. Not only should OJK be free from government interference, legislative, and judiciary, but also free from other parties such as irresponsible financial services industries, society, and individuals. The reformulation of independence is essential to ensure that OJK can carry out its duties effectively and efficiently in maintaining financial system stability.

Recommendations for Reformulation

Some recommendations that can be applied to reformulate the definition of independence in the OJK Law include:

Reducing the dominance of the government and focusing on KSSK coordination: The dominance of the Minister of Finance can cause psychological and political pressure for other DK members.
The structure of the Chairperson of the DK Selection Committee is not always held by the Minister of Finance: This can help to reduce the influence of the government in OJK's affairs.
Confirmation of OJK institutional status as a state institution and an explicit public legal entity: This can help to establish OJK's autonomy and independence.
The confirmation of OJK's responsibility for SSK: This can help to ensure that OJK is responsible for its actions and decisions.
OJK Chair has veto rights in decision making: This can help to ensure that OJK's decisions are made with the utmost care and consideration.
The term of office of DK members is run gradually: This can help to ensure that OJK's leadership is stable and consistent.
OJK's own management of the remaining OJK levies as a reserve fund: This can help to ensure that OJK has the necessary resources to carry out its duties.
OJK has his own investigators, not Polri and PPNS investigators: This can help to ensure that OJK's investigations are conducted independently and impartially.
Integration arrangement between financial and non-financial institutions: This can help to ensure that OJK's regulatory framework is comprehensive and effective.
OJK's institutional status confirmation explicitly in the constitution: This can help to establish OJK's autonomy and independence in a constitutional framework.

Conclusion

The reformulation of the definition of independence in the OJK Law is essential to ensure that OJK can carry out its duties effectively and efficiently in maintaining financial system stability. The recommendations outlined above can help to reformulate the definition of independence and ensure that OJK is free from government interference, legislative, and judiciary, as well as other parties such as irresponsible financial services industries, society, and individuals. This will help to create a healthy, strong, and sturdy financial system, which can support national economic growth in a sustainable manner.
Frequently Asked Questions (FAQs) about Reformulation of Strengthening the Status of Independence of Financial Services Authority

Q: What is the main objective of reformulating the status of independence of the Financial Services Authority (OJK)?

A: The main objective of reformulating the status of independence of OJK is to ensure that the institution can operate freely and effectively in maintaining financial system stability. This includes reducing the dominance of the government and focusing on KSSK coordination, confirming OJK's institutional status as a state institution and an explicit public legal entity, and ensuring that OJK has the necessary resources to carry out its duties.

Q: Why is the independence of OJK important?

A: The independence of OJK is important because it allows the institution to operate freely and effectively in maintaining financial system stability. This includes making decisions without interference from other parties, such as the government, legislative, and judiciary, as well as irresponsible financial services industries, society, and individuals.

Q: What are some of the challenges facing OJK in maintaining financial system stability?

A: Some of the challenges facing OJK in maintaining financial system stability include the dominance of the government, the lack of resources, and the need for more effective and efficient regulatory frameworks. Additionally, OJK faces challenges in integrating financial and non-financial institutions, as well as ensuring that its investigations are conducted independently and impartially.

Q: How can OJK's independence be ensured?

A: OJK's independence can be ensured by reformulating the definition of independence in the OJK Law to make it more assertive and comprehensive. This includes reducing the dominance of the government and focusing on KSSK coordination, confirming OJK's institutional status as a state institution and an explicit public legal entity, and ensuring that OJK has the necessary resources to carry out its duties.

Q: What are some of the benefits of reformulating the status of independence of OJK?

A: Some of the benefits of reformulating the status of independence of OJK include:

Ensuring that OJK can operate freely and effectively in maintaining financial system stability
Reducing the dominance of the government and focusing on KSSK coordination
Confirming OJK's institutional status as a state institution and an explicit public legal entity
Ensuring that OJK has the necessary resources to carry out its duties
Integrating financial and non-financial institutions
Ensuring that OJK's investigations are conducted independently and impartially

Q: How can the public contribute to the reformulation of the status of independence of OJK?

A: The public can contribute to the reformulation of the status of independence of OJK by:

Providing feedback and suggestions on the draft of the OJK Law
Participating in public consultations and hearings
Engaging in discussions and debates on the importance of OJK's independence
Supporting organizations and initiatives that promote OJK's independence
Encouraging policymakers to prioritize OJK's independence in their decision-making processes

Q: What are some of the next steps in the reformulation of the status of independence of OJK?

A: Some of the next steps in the reformulation of the status of independence of OJK include:

Finalizing the draft of the OJK Law
Conducting public consultations and hearings
Engaging in discussions and debates on the importance of OJK's independence
Submitting the draft of the OJK Law to the legislature for approval
Implementing the reforms and ensuring that OJK's independence is maintained.

Q: How can the public stay informed about the reformulation of the status of independence of OJK?

A: The public can stay informed about the reformulation of the status of independence of OJK by:

Following news and updates on the OJK website and social media channels
Attending public consultations and hearings
Engaging in discussions and debates on the importance of OJK's independence
Subscribing to newsletters and updates from organizations and initiatives that promote OJK's independence
Contacting OJK directly to ask questions and provide feedback.