TUGAS 1 SOFTSKILL

BAHASA INGGRIS BISNIS 2

CONDITIONAL SENTENCES

NAMA : MEGA PUSPITA

NPM : 14212515
KELAS : 4EA19
DOSEN : ZAINAL RIADI, Spd, MSas

FAKULTAS EKONOMI
UNIVERSITAS GUNADARMA
2016

Govt left toothless by financial crisis bill

The Jakarta Post, Jakarta | March 15 2016 | 8:36 AM

The current framework laid out by the financial system crisis prevention and mitigation bill
(PPKSK), which leaves little room for the President to take action during any future financial
crises, has raised concerns among analysts over how effectively crises can be managed should
anything unprecedented occur.
The PPKSK bill formerly known as the financial stability safety net (JPSK) bill prevents
any government intervention or financial assistance in the event of a financial crisis that may
lead to the collapse of one or more systematically important domestic banks (DSIBs).
The final discussion between the government and lawmakers at the House of Representatives last
week saw the latter remove all chapters and articles related to the use of state funds, which they
said resembled the Bank Century bailout in 2009.
The bill, expected to be passed into law this week, now stipulates that owners of the DSIBs are to
be primarily responsible for saving ailing banks by injecting fresh capital to improve their
solvency, a scheme dubbed as bail-in.
If the scheme fails, the Deposit Insurance Corporation (LPS) will be the institution tasked with
stepping in, relying on its own financial resources to cover customers deposits and finance the
lender takeover.
However, to DBS Bank economist Gundy Cahyadi, such an arrangement is not credible.
We dont know when or from where a crisis occurs. If anything unprecedented happens, we will
see a domino effect at a high speed, the Singapore-based economist said over the phone on
Monday, giving the bankruptcy of US lender Lehman Brothers in 2008 as an example.
At that time, Lehman Brothers was the fourth-largest investment bank in the US, yet the US
government decided to let it fail. Many say that the collapse triggered economic turmoil in the
US.

Gundy insisted that immediate government intervention was of utmost importance, but the bill
provided no space for it to happen.
As reported before, Article 35 of the latest draft of the bill says that the president cannot take
measures other than those recommended by the Financial System Stability Committee (KSSK).
Besides the LPS, the KSSK comprises three other institutions, namely the Finance Ministry,
Bank Indonesia (BI) and Financial Services Authority (OJK).
According to the bill, the President may attempt to issue a regulation in lieu of a law (Perppu) to
handle the crisis if available recommendations are insufficient, but the issuance of the Perppu
will have to be coordinated with lawmakers at the House of Representatives, whereas the
President is required to take a decision within 24 hours.
The Perppu may also be called into question as it has less legal authority than that of a law.
Samuel Asset Management economist Lana Soelistianingsih argued that the lack of government
presence could create negative sentiment toward the domestic banking industry
Customers may be afraid of keeping their money in banks, knowing that the government will
not be there for them if a crisis erupts, she said.
Even if the customers opt to keep their money in banks, the scheme will potentially create wider
gaps among banks, with the majority of customers choosing large banks over small ones.
Moodys Analytics economist Faraz Syed said that the magnitude of economic shocks would
determine the required response, but acknowledged that the LPS would not be able to handle
everything by itself.
Its probably unreasonable to expect all bank deposits to be guaranteed by a third party and
whether the LPS would be sufficient to cover banks in a financial shock depends largely on how
large and distressed a banks balance sheet becomes.
In such a scenario, he added, it would expect the central bank to boost liquidity measures to ease
money market stress.
SUMBER :
http://m.thejakartapost.com/news/2016/03/15/govt-left-toothless-financial-crisis-bill.html

Banks working on gradual rate cuts

The Jakarta Post, Jakarta | March 21 2016 | 8:44 AM
Domestic banks have stressed that they are working hard to trim lending rates to a single digit
this year as Bank Indonesia (BI) continues slashing its benchmark rate amid calls for more
affordable loans.
With the countrys central bank cutting its key interest rate for a third consecutive month, banks
are expected to continue reducing their time deposit rates as the cost of funds is deemed the
biggest component affecting lending rates.
Top banking executives contacted by The Jakarta Post said they were in the process of
recalculating their costs, but admitted that reducing the cost of funds would take a relatively long
time as time deposits had different maturity periods.
Bank Rakyat Indonesia (BRI) finance director Haru Koesmahargyo, Panin Bank vice president
director Roosniati Salihin, OCBC NISP president director Parwati Surjaudaja and Bank
Tabungan Negara (BTN) finance director Iman Nugroho Soeko said lenders should wait for
existing time deposits to reach their maturity before setting new rates.
Haru said new rates for time deposits could only be effective in the next two or three months as
time deposits at almost all banks had an average three-month maturity period.
Haru added that banks were also preparing for a new Financial Services Authority (OJK) rule
that would oblige pension funds and insurance companies to place more funds in the government
debt paper (SBN) scheme, which would cause a decline of their investments in time deposits.
With cuts in the primary reserve requirement [GWM] and BI rate, the market gets more
confident and I think Bank Indonesia still has room to cut GWM to 5 percent. Another
benchmark rate cut could follow if the inflation rate and exchange rate are stable, he said in a
text message on Friday.

The central bank announced on Thursday its decision to cut its key interest rate by 25 basis
points (bps) to 6.75 percent, bringing total rate cuts since January to 75 bps. The GWM was
steady at a level 6.5 percent after the central bank lowered it by a total 150 bps since December.
Iman voiced a similar opinion, saying BI had room to continue slashing its GWM to 5 percent,
which would significantly decrease the cost of loanable funds and directly affect lending rates.
If the cost of funds has started to decrease, we will continue to cut our lending rates without
sacrificing our financial performance. Starting from the end of this month, we have decided to
cut our lending rates by 25 bps across the board, he said.
BI has found in its assessment that declines in banks time deposit rates had only reached 7 bps
and lending rates about 4 bps, a far cry from the total cuts of 75 bps and 150 bps in the key rate
and GWM, respectively.
BI economic and monetary policy director Juda Agung said the central bank saw that its
monetary policy transmission to the banking industry was currently relatively slow compared to
the period of 2009 to 2011 when it also had a relaxed stance.
Juda said BI initially suspected that the slow transmission was caused by slow demand in loans
and tight liquidity, so it cut GWM to add more funds to the market.
We expect that in the next three to four months, a reduction in time deposit rates can match the
total range of BI rate cuts, he said.
BI Governor Agus Martowardojo said the government might need to address fiscal concerns on
revenue, subsidies and legal certainty in order to receive an investment grade rating from
Standard & Poors, which would help attract more investments to spur the economy.

Indonesia obtained investment grade ratings from Fitch and Moodys in 2011 and 2012, while
Standard & Poors had yet to give the country investment grade status and, instead, changed its
credit rating to positive in May last year.
SUMBER :
http://m.thejakartapost.com/news/2016/03/21/banks-working-gradual-rate-cuts.html

Rupiah returns to 12,900 level amid deregulation,

thejakartapost.com, Jakarta | March 12 2016 | 1:02
A Bank Indonesia staff member shows damaged money at a money replacement counter, set up
as part of the banks clean money policy, aimed at providing the public with a good quality
means of exchange.
The rupiah closed 72 points stronger against the US dollar, leaving its 13,000 level to hit 12,980
at Fridays close. The currency is strengthening as a result of deregulation policies, President
Joko Jokowi Widodo said recently.
Bank Himpunan Saudara money market analyst Rully Nova said developed countries policy to
maintain a zero benchmark interest rate, and even a negative interest rate in Japan, had given the
rupiah the opportunity to move with an upward trend as global investors shifted their money to
developing markets with a high yield.
"The positive yield in Indonesia makes rupiah denominated assets more attractive to investors.
However, the swing in the fluctuation should not be too wide so local investors and businessmen
can easily adjust to the change," he said as quoted by Antara news agency in Jakarta on Friday.
During the inauguration of a bonded logistics center on Thursday, Jokowi claimed that
deregulation packages, along with positive monetary and market policies in Indonesia, had
helped the rupiah to strengthen.

Jokowi underlined that the rupiah appreciation was not merely triggered by external factors. He
asserted that both external and internal factors such as the good measures taken by the
government had equally affected the strengthening of the rupiah.
Both [triggered the rupiah appreciation]. If we did not undertake deregulation strategies,
external factors will not help appreciation. In return, there were capital inflows. Automatically it
[the rupiah] strengthened, he said.
An analyst at Platon Niaga Berjangka, Lukman Leong, added that the benign inflation trend in
Indonesia should also support the rupiah to strengthen further this year.
"Low inflation may lead to a further slash in the Bank Indonesia rate, which in turn will lower
the cost of bank loans significantly, which will help domestic consumption and support the
economy," he said. (ags)
SUMBER :
http://m.thejakartapost.com/news/2016/03/12/rupiah-returns-12900-amid-deregulation-low-ratetrend.html