Abstract
The chapter focuses on analyzing the risks exposed in Islamic banks and proposes criteria to design and implement macroprudential policy under dual financial system in Indonesia. Under this financial system, Islamic bank’s risks are among the primary concern due to the common and unique risks exposed. The study uses gap analysis to analyze the macroprudential design. The study suggests redefining on two main aspects: (a) objective and role of central bank and (b) objective, scope, instrument, and authority of macroprudential policy. Therefore, some preconditions need to be in place toward achieving effective macroprudential framework under dual systems such as institutional, instruments, and related arrangements in order to preserve financial system stability.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Bank Indonesia (2014) Peraturan Bank Indonesia No. 16/11/PBI/2014 tentang Pengaturan dan Pengawasan Makroprudensial
Bank of England (2009) The Role of Macroprudential Policy. Discussion Paper
BIS (2011) The future of central banking under post-crisis mandates. Speech presented at Ninth BIS Annual Conference—monetary and economic department. Bank for International Settlements, Basel, Switzerland
Borio C (2009) Implementing the macroprudential Approach to Financial Regulation and Supervision. Banque de France Financial Stability Review No. 13, September
Chapra MU (1985) Towards a just monetary system. The Islamic Foundation, Leicester
Greuning HV, Iqbal Z (2008) Risk analysis for Islamic banks. The World Bank, Washington, DC
Group of Thirty (2010) Enhancing financial stability and resilience: macroprudential policy, tools, and systems for the future. Group of Thirty, Washington, DC
Harun CA, Rachmanira S (2014) Kerangka Kebijakan Makroprudensial Indonesia. In Bank Indonesia (2014) Kajian Stabilitas Keuangan, No. 22, March. Bank Indonesia, Jakarta, Indonesia
IMF (2011) Macroprudential policy: an organizing framework, 14 March. International Monetary Fund, Washington, DC
Jenkins P, Thiessen G (2012) Reducing the potential for future financial crises: a framework for macro-prudential policy in Canada. CD Howe Institute Commentary No. 351. CD Howe Institute, Toronto, Ontario
Kremers J, Schoenmaker D (2010) Twin Peaks: Experiences in the Netherlands. Special Paper, (196), pp. 1–11
Lamfalussy A (2011) Keynote speech. In Monetary and Economic Department BIS (2011) The future of central banking under post-crisis mandate. BIS Papers No. 55. Bank for International Settlements, Basel, Switzerland
Lim C, Columba F, Costa A et al (2011) Macroprudntial policy: what instruments and how to use them? IMF Working Paper, WP/11/238, October. International Monetary Fund, Washington, DC
Mishkin FS (2012) Macroeconomics policy and practice. Addison-Wesley, Boston
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Ascarya, Karim, A.A., Rahmawati, S., Muqorrobin, M., Wiranatakusuma, D.B. (2016). Conceptual Proposal for Future Macroprudential Framework Under a Dual Financial System in Indonesia. In: Zulkhibri, M., Ismail, A., Hidayat, S. (eds) Macroprudential Regulation and Policy for the Islamic Financial Industry. Springer, Cham. https://doi.org/10.1007/978-3-319-30445-8_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-30445-8_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-30443-4
Online ISBN: 978-3-319-30445-8
eBook Packages: Economics and FinanceEconomics and Finance (R0)