By: Moch. Irfandi)*
The existence of the banking sector has not yet been able to bring the availability of capital to support the acceleration of infrastructure development in Indonesia. Many of those who commented on this condition by seeing a high financial reserve banking in Indonesia used to anticipate future if an economic crisis in Indonesia happens.
Highlighting the development of the banking financial sector, Nobel Prize Laureate in Economics Professor Robert Fry Engle III of the opinion on the condition of capital held by banks in Indonesia.
According to Engle, capital of Indonesia’s banking industry is too high, but this time Indonesia has a very low risk in the banking industry. Bank Indonesia has a large capital, but instead is reserved to anticipate the crisis. Large capital but instead made up for this backup is not really necessary. The capital is not channeled into financing to sectors that need.
This is what distinguishes Engle seen China’s banking industry and banking Indonesia. China’s banking, Engle said, are in the capital of the low or undercapitalized, while the Indonesian banking system over the capital but did not give a loan or credit.
If banks hard to provide financing, then this would be an opportunity for alternative financing providers. Engle cited is peer to peer lending, financing services via the Internet, startups or startups, to shadow banking.
Meanwhile, Chairman of Commission XI of the House of Representatives Melchias Mekeng states, the role of the financial services industry has not been optimally support development.
Melchias explained, the gross domestic product (GDP) of Indonesia larger than Thailand, Singapore and Malaysia. However, Indonesia’s capital market is still less than three countries.
The ratio of market capitalization to GDP, we are in November 2016 only amounted to minus 0.4 percent compared to 1.5 percent of Singapore Malaysia 2.4 percent and Thailand at 1.1 percent.
The financial services industry still has tremendous potential to be optimized. You do this by increasing investment in the country and abroad, but he considers that they do institutions in the financial industry.
Observing the development of the financial industry sector in Indonesia, through the Indonesian banking sector is expected to be a source of national development that not only relies on the state budget. Central and regional governments can work together with the Financial Services industry sectors to build this nation so that it can improve people’s welfare.
)* Indonesia’s Political Economy Observer
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