Description

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.