Batunanggar and Budiawan, Problem Bank Supervision in Indonesia

This paper is organised in six main parts. Following the introduction, the Indonesian legal framework in dealing with problem banks is presented in Part 2. Part 3 outlines the evelopment of the banking regulation and supervision of the Indonesian banking system during the pre- and post-crisis period of 1997/98. Then, the supervisory tools are presented in the following order: problem bank identifi cation (Part 4), problem bank intervention (Part 5), and problem bank resolution, including a range of remedial measures to resolve the defi ciencies of a problem bank and to resolve a failed bank (Part 6). Part 7 provides an outline of the crisis-management framework and policies adopted. Finally, Part 8 concludes with the lessons learned and proposes the policy recommendations for more effective problem-bank management in Indonesia.