The Indonesian government and the central bank have signed a joint decree to improve coordination between fiscal and monetary authorities and help reform financial markets, a report said Thursday.

The package was expected to accelerate reforms in the banking sector, non-bank financial institutions and in capital markets.

It would also enhance businesses' access to capital, reported The Jakarta Post newspaper.

"The package is also aimed at establishing a stronger, more balanced and stable structure in the financial markets," said Coordinating Minister for the Economy Boediono.

Boediono said the decree would complement two previously issued packages on investment and infrastructure development.

It sought to strengthen the coordination between fiscal and monetary authorities after the "small financial crisis" late last year, he said.

Coordination will occur through the creation of laws on sector "safety nets" and a stability forum, which will draft "financial architecture" and implement an assessment program.

For the banking sector, the package will formulate policy to improve the performance of state-owned banks, through regulatory changes on non-performing loans.

The government will also improve prudential measures for non- bank financial institutions, such as insurance, pension fund and finance companies, and venture capital firms. It will also include protections for policyholders in the insurance industry through a mediation agency.

The package will help improve the liquidity, efficiency and integrity of capital markets, and develop infrastructure to improve price transparency in the trading system.

Boediono said the package would reconfirm the government's privatization policy for state enterprises by setting up a privatization committee and creating a blueprint on strategy.

At present, the government's policy on privatization remains unclear, with some nationalist politicians strongly opposed to the idea. Those in favor of privatization note that most state enterprises have a history of performing badly under the government's management.

The government also plans to draft a law on the National Export Financing Agency to help boost the country's exports.

Boediono said the implementation and monitoring of the package would be coordinated by a team he led, with members including Bank Indonesia governor Burhanuddin Abdullah, Finance Minister Sri Mulyani Indrawati and State Minister of State Enterprises Sugiharto.

Source: Xinhua