The Analysis of Financial Services Authority (FSA) Function in the Supervision of the Good Corporate Governance (GCG) Implementation for Banking Institutions in Indonesia

Abstract

In terms of running the implementation of the guidelines of Good Corporate Governance (GCG), the Financial Service Authority (FSA) had a function in monitoring the implementation of the guidelines.  Implementation  of the Code of GCG was one key to success for growing companies   and  profitable   in  the  long  term  while  winning  global  business  competition, especially  for  companies  that  had  been  able  to  grow  at  the  same  time  being  open,  GCG Principles were needed to achieve bank business continuity (sustainability)  with regard to the interests of shareholders, customers and other stakeholders.

The research method uses normative and empirical research approach, using secondary and  primary  data,  which  retrieved  from  library  research  and  field  studies,  and  data  were analyzed with qualitative analysis.

Based on the results, the FSA study had a function in organizing the system of regulation and supervision was integrated to the overall activity in the financial service sectors, as set out in  Article  5  of  FSA  regulation.  In  the  implementation  of  GCG  for  banking  institutions  in Indonesia, there were indicators that regulate governance corporations, so as to assess whether these banks had or had not implemented GCG is to look these indicators. Indonesian banking institution  supervision  could be divided into two (2) types of monitoring;  indirect and direct supervision.

The researcher could give suggestions such as for Indonesian Bank also known as BI to provide  the  infrastructure  especially  regarding  IT  supervision  of banking  institutions  to  the FSA, so the FSA can supervise accurately. Implementation  of GCG in banking institutions in Indonesia was expected to continue to maintain the principles of GCG. GCG should not only for banks but also applied to the RB, Capital Markets, Insurance, Finance Companies, Pension Funds, Microfinance Institutions and all other financial institutions.