JAKARTA – The financial sector in Indonesia is much safer than before because we have experienced a crisis. Where the Asian financial crisis in 1998 changed the Indonesian banking architecture, so that it was far more prudent in managing risk.
This was conveyed by the Dean of the Faculty of Economics and Business, University of Indonesia, Dr. Teguh Dartanto, Ph.D in a dialogue program with the theme “Support the Minister of Finance, the Danger of the US Banking Crisis Scouts RI” at a private TV station, Saturday (18/3) evening.
He added, from the experience of the 2008 financial crisis, a number of banks in America collapsed which had an impact on Indonesia and other countries. Indonesia has experience during a pandemic. Indonesia has become one of the best economies which has performed quite well during the pandemic.
“The experience of the financial crisis in 2008, where there was a bank collapse in America and had an impact on Indonesia and other countries. Indonesia also has experience during the pandemic and became one of the best economies which was quite good during the pandemic,” said Teguh Dartatnto.
Teguh also added that Indonesia can properly control issues related to finance and policies in the real sector, namely the fiscal, monetary and financial sectors. This means that there is good coordination between the Ministry of Finance, Bank Indonesia, OJK and LPS. Experience during the last pandemic can be a lesson, so that Indonesia is sufficiently prepared to face global conditions where there is a possibility that there will be a domino effect.
“Indonesia can properly control issues related to finance and policies in the fiscal, monetary and financial sectors. There is coordination between the Ministry of Finance, Bank Indonesia, OJK and LPS. The domino effect is definitely there, but not as big as we worry about. With fairly intense coordination from the four authorities, as well as experiences from crises and pandemics, we can mitigate these concerns,” he explained.
In the same place, Chairman of the Supervision Agency of Bank Indonesia, Muhammad Edhie Purnawan, Ph.D said, the composite Purchasing Manager Index (PMI) indicator for several countries is still above 50 and is still relatively good. There are also those that show improvement, despite some turmoil in the banking sector in America in the last few days.
“Looking at various indicators such as the Composite Purchasing Managers Index (PMI) from several countries, it is still above 50, so it is still relatively good. If you look at the estimates a few months ago, that the world economy is predicted to go dark in 2023, it looks like it will be better. Even though we know there have been some turbulences in banking in America the last few days,” said Muhammad Edhie.
He explained that banks in Indonesia were relatively safe because the link between the bankruptcy of the three banks in America and Indonesia was not high. What needs to be considered is the companies being financed, especially start-ups that are linked to big banks in Europe or America.
“Banks in Indonesia don’t need to worry, banks in Indonesia are relatively safe because their connection with the three bankrupt American banks is not high. But what needs to be paid attention to is the companies being financed, especially start-ups that are linked to big banks in Europe or America,” he concluded.
All parties must fully believe in the statement of the Minister of Finance Sri Mulyani, that there will not be a relatively large impact on the financial sector in Indonesia due to the collapse of several large banks in the United States. The collapse of these banks did not have a significant impact on the financial market in the country. It’s just that indeed, this needs to be given special attention to the relevant authorities. [*]