UK Investors Interested in Increasing Financial Investment

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A number of investment companies originating from the UK have shown interest in increasing their investment in the financial services sector, especially those related to “Green financing” and supporting the achievement of sustainable development programs. Therefore, many companies originating from the UK make investments to continue sustainable development. Well, on this occasion the article will discuss about English financial services.

Therefore, the statement that emerged in the rendezvous of the United Kingdom Financial Services Dialogue, last weekend in Jakarta, which was attended by the Chairman of the Board of Commissioners of the Financial Services Authority (Ojk), the British Ambassador to Indonesia Owen Jenkins and also dozens of investors and executives of the UK financial market. With the existence of English Financial Services, we can carry out a lot of development involving leading investors which can produce several benefits.

UK Investors Interested in Increasing Financial Services Investment

The event was organized by the Young Indonesian Professionals’ Association (Yipa) United Kingdom in collaboration with OJK. And Britcham Indonesia and supported by the British Embassy Jakarta, Icma, Asifma, Equatorise, Accenture and Ginting Reksodiputro. “This event was held because there was an interest in strengthening business interactions. And investment from the UK to Indonesia,” said Executive Director, YIPA United Kingdom Steven Marcelino.

Ambassador Owen Jenkins also explained that the UK has positioned itself as a friendly country for Indonesia to collaborate in green finance, Islamic finance, fintech and various other important initiatives in the financial market.

The indicator of “Green economy” in Indonesia grew quite significantly with overall “Green loans” at US$133 billion (Rp1.850 trillion), cumulative “Green bonds” spending of US$169 million and the Government’s “Green sukuk” spending of US$2 million.

Wimboh Santoso on that occasion said that the Indonesian economy as well as the financial services sector was in a stable and well-maintaine situation, including to deal with the world’s economic slowdown.

According to Wimboh, OJK together with Bank Indonesia and the Government of Indonesia have a strong commitment to respond to external challenges with various anticipatory policies. “The government has launche various tax incentives to attract investment into Indonesia and Bank Indonesia itself has lowere interest rates by 50 bp to 5.5 percent in the last two months to anticipate the slowdown in world economic development.

He said that OJK cooperates with various parties including the central and local government, Kadin, Apindo and players in the financial industry to develop leading sectors, namely: Tourism, Manufacturing, Mining, Agribusiness and Fisheries.

“The development of this leading sector is expecte to increase exports and import substitution, access employment opportunities and increase the tax base,” he adde. On the same occasion, Britcham Indonesia awarde Wimboh Santoso the Special Alumni Award category at the 40th Anniversary Special Discretaionary Award Night.

this can bring the regulatory and supervisory structure of banks in line with increasingly integrate financial markets. Moreover, three weeks after that, Queen Elizabeth II and her husband, the Duke of Edinburgh, were also aske to inaugurate the building with other important guests and a hundre people representing 1,900 total employees.

The birth of the baby of the new forum became the hope of many parties to replace the role of the Bank of England (Boe), which was recognize as old or antiquate because it had overseen the British banking world for more than 200 years.

The BOE’s grandparents were remove for being responsible for five bank bailouts and 12 bank closures, starting with Neal Banker (London Banking House) in June 1772 and ending with Baring Bank in 1995.

Along with that, the merger process of nine financial supervisory authorities has been carrie out involving thousands of employees. The merger process was considere very tense by Howard Davies, head of the FSA at the time. The reason is that the merger process is very complex, there is no supervision forum merger guide, and there is accurate monitoring by other regulatory forums around the world that will imitate the FSA.

In the end, to carry out its operational activities, the FSA was provide with capital by the government in the amount of GBP 155 million (or equivalent to Rp. 2.06 trillion at the December 1998 exchange rate), and finally every year it was provide with working capital according to the propose budget.

After the forum was operating for 12 years, the aspirations and hopes of the British population in the baby who had starte to become a teenager did not become a phenomenon. The FSA itself is still facing no less complicate internal problems. The merger integration of several supervisory forums of different cultures turne out to be difficult to put together, instead it create a high level of conflict and uncomfortable working conditions.

One FSA official also acknowledge that regulations are often not taken seriously and that only a small part of the work can be done effectively. This also has the effect of high employee turnover and the incompetence of some employees, which results in them not understanding what to do.

Also the work does not go well, because the work is so complex that it creates weaknesses in bank supervision.

Over the years there have been several failures in insurance companies. Investment businesses and banks, draining the Financial Services Compensation Scheme/Fscs (UK Lps). Funds of GBP 1 billion (equivalent to Rp 18.6 trillion at the December 2007 exchange rate).

The population’s patience limits then reache a peak after the collapse of. The Northern Rock bank which was followe by the government takeover of Bradford Bingley. The rescue of the Royal Banks of Scotland, Lloyds Tsb and Hbos. And most recently the 2009 collapse of a small bank, the Dunfermline Building Society. With a total of costs GBP 1.3 trillion (equivalent to Rp 21.096 trillion.

The Parliamentary Economics Committee cite three main mistakes of the FSA. Namely the first lack of effective communication. By the FSA with the BOE and the UK Treasury (H.M. Treasury). Second, forgetting about their duties. Of carrying out systemic bank supervision (macroprudential). And third, really focusing on. The task of supervising business activities (Conduct of business) so as to ignore the supervision of individual banks (Micro prudential).

The Orthodox Party also gave a similar evaluation. They have even prepare a proposal aime at reforming the entire financial regulatory. And supervision platform and also returning the benefits of bank supervision to Boe.

Political pressure, enormous internal problems. And the constant targeting of the population have prompte more senior supervisors to leave for other companies. Including the recent Deputy Chief and CEO of the FSA.

The news of the announcement of the resignation of Hector Sants. Known as the captain of the FSA, last week, did not seem very widely heard in Indonesia. However, this important information has already made headlines in the British media. The closure of the FSA and the return of the use of bank supervision. To the BOE are likely to occur within months of. The Orthodox Party’s return to power.

In Indonesia

The government, with the mandate of Law Number 3 of 2004 concerning Bank Indonesia. Remains adamant that it will separate. The benefits of bank supervision from Bank Indonesia. Moreover, according to reports. The government has prepare the OJK Bill. Which will be discusse immediately in the first quarter at the latest. And will form the OJK before it ends.

Of course, it’s legal, considering that there have been several faile bank problems. Including Century Bank. Not only that, of course. Base on good intentions to improve the financial forum supervision platform. So that the weaknesses that occur can be correcte. However, we have to be honest. Is it appropriate for us to experiment with transferring bank supervision from BI. And merging it with other supervision?

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Risk of failure

Not only the problems face by OJK. Experts show that bank failures are generally caused by political hegemony. From parties who have money and power. And the failure of bank supervision was due to a case of commitment. From political actors who were more likely to save non-solvent banks than to close banks.

With Indonesia’s current atmosphere. Which is still characterize by a transactional democratic process, and full of legal violations. Our rules for establishing the OJK will be very risky and require huge costs for competent HR recruitment. Cultural integration processes, news platforms, data and technology. , as well as the development of a very complex supervision platform.

The failure experience by the FSA as a benchmark. For combining the benefits of supervision should trigger us to think clearly. And make sure that the rules taken are the right ones. And are best for the interests and welfare of all Indonesian people.

Well, here is an important statement regarding British financial services, hopefully the discussion above is useful and thank you.

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