BI Issues Consultative Paper on Basle II Implementation
Thursday, 18 January, 2007 | 16:43 WIB

TEMPO Interactive, Jakarta: Bank Indonesia (BI) will issue a Consultative Paper on Implementation of the Basle II Accord.

Through this paper, the central bank is asking for opinions from banks and stakeholders in line with the regulation regarding the gradual implementation of the Basel II Accord, which is to be issued.

Muliaman D. Hadad, a Deputy Governor of Bank Indonesia, said that the consultative paper was prepared by BI and the banking sector representatives on the Working Group for Implementation pf the Basle II Accord.

The document will contain various information such as the range of implementation, the approachs that will be used, and the policies that will be applied in calculating the needs of bank capitalization.

“This consultative paper is part of the communication and dissemination of information processes before we issue the policy,” said Muliaman yesterday (01/17) in Jakarta.

He has asked that banking circles and people see Basle II Implementation not only from short term perspectives: that is, to meet the aspect of capital adequacy.

The implementation, he said, must be viewed as an attempt for improving banking risk management and the quality of bank control by BI in line with international standards.
The Basle II Accord will be applied to all general banks in phases by 2008.

There will be two approaches that will be implemented: by calculating credit risk (standardized approach), and by calculating operational risk (basic indicator approach).