<![CDATA[The stability of the financial system constitutes a fundamental prerequisite for sustainable economic development and public confidence in the banking sector. In Indonesia, this objective has been reinforced through the enactment of Law No. 4 of 2023 on Financial Sector Development and Strengthening (the P2SK Law), which introduces comprehensive reforms to the regulatory and institutional framework governing financial system stability. One of the most significant aspects of this reform is the reformulation of the authority of the Deposit Insurance Corporation (Lembaga Penjamin Simpanan/LPS), particularly in relation to bank resolution and crisis management mechanisms.This study aims to examine the reformulation of LPS authority under the P2SK Law and to analyze its legal implications for the financial safety net framework in Indonesia. The research employs a normative legal method, utilizing statutory, conceptual, and comparative approaches. Primary legal materials consist of relevant legislation and implementing regulations, while secondary materials include scholarly legal journals and authoritative doctrinal sources. A comparative analysis with deposit insurance institutions in selected jurisdictions is also conducted to provide contextual insight.The findings demonstrate that the P2SK Law significantly expands and restructures the authority of LPS, notably by strengthening its role in early intervention, bank resolution planning, and the handling of both systemic and non-systemic banks. This reform reflects a shift toward a more proactive and integrated crisis management model within the Financial System Stability Committee framework. However, the expansion of authority also raises legal concerns regarding the potential overlap of mandates among financial authorities, the preservation of institutional independence, and the adequacy of accountability mechanisms.The study concludes that the reformulation of LPS authority under the P2SK Law has the potential to enhance the effectiveness of financial crisis management and to reinforce financial system stability. Nevertheless, the success of this reform depends on the clarification of authority boundaries, the harmonization of inter-institutional coordination, and the strengthening of legal safeguards to ensure transparency and accountability.]]>
