Covid-19 (Corona Virus Disease) Article - Stability Policy Of Financial System In Handling Of Covid-19 Based On Government Regulation Number 1 Of 2020

In order to maintain financial system stability during Corona Virus Disease 2019 (Covid-19) pandemic and to face the threats of economic crisis and or financial system stability, the Government is deemed necessary to regulate a financial system stability policy. Therefore, the Government issued the Government Regulations in lie of Laws on State Financial Policy and Financial System Stability for Handling Corona Virus Disease 2019 (Covid-19) And / Or In Facing Threats That Endanger National Economy And/o Financial System Stability. ("Government Regulation No.1 of 2020"). Article 1 Paragraph 5 of Government Regulation No.1 of 2020 regulates the financial system stability policy including the policy for handling financial institution problems that endanger the national economy and/or financial system stability.

Due to the implementation of financial system stability policies, the Financial System Stability Committee, hereinafter referred to as KSSK, is given the authority to hold meetings through face-to-face or using information technology and establish a scheme of providing support by the Government in handling financial service institutions issues and financial system stability that endangers national economy (Article 15 Government Regulation No.1 of 2020). The Financial System Stability Committee is a committee that organizes the prevention and the handling of financial system crises to carry out the interests and the tenacity of the country in the economic sector as referred to in the Law concerning the prevention and the handling of financial system crises (Explanation of Article 15 Government Regulation No.1 of 2020).

To support the exercise of the KSSK's authority, Bank Indonesia, as a related financial institution, is given the authority to: provide short-term liquidity loans or short-term liquidity financing based on sharia principles to systemic banks or banks other than systemic banks. Bank Indonesia is also authorized to purchase long-term state debt and/or state Islamic sharia securities on the primary market that are issued for a specific purpose due to the Covid-19 pandemic, providing access to funding to corporates / private entities by repurchase agreement of Government Securities or Government Islamic Securities owned by a corporation / private through banking and other special authorities as an effort to maintain financial system stability as mentioned in Article 16 of Government Regulation No.1 of 2020.

Other institution which is given special authority to support the implementation of the KSSK authority is the Financial Services Authority (OJK). In Article 23 of Government Regulation No.1 of 2020, OJK is given authority to: give written orders to financial service institutions to conduct merger, consolidation, takeover, integration, and/or conversion, determinate exceptions for certain parties from the obligation to carry out the principle of openness in the market sector capital in the context of preventing and handling financial system crises, and stipulating the provisions regarding the use of information technology in holding a general meeting of shareholders or other meetings based on statutory provisions that must be carried out by financial service industry agent. Any person who deliberately ignores, does not fulfill, does not implement or hinders the implementation of the authority of the Financial Services Authority as referred to in Article 23 paragraph (1) letter a, shall be liable to imprisonment and criminal fines, and if it is done by the corporation, it shall be penalized with fine at least Rp1. 000,000,000,000.00 (one trillion Rupiah) as mentioned in Article 26 of Government Regulation No.1 of 2020.

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