The phenomenon of the collapse of banks in the United States seemed to be a real alarm about the potential for a global economic crisis. Nevertheless, many parties fully support the Minister of Finance Sri Mulyani in facing the crisis which is considered capable of bringing Indonesia to a safe position.
In recent days, a number of banks in the United States have filed for bankruptcy. The two regional banks in the United States are Silicon Valley Bank and Signature Bank. Many people are worried that the closure of these two banks will impact global financial markets, including Indonesia.
Referring to Investopedia, when a bank fails or closes, the bank will likely try to borrow money from other banks to pay off its depositors. If the bank is unable to pay its depositors, it is likely that the depositors will immediately withdraw their money from the bank.
The bankruptcy of a bank exacerbates the situation because a failing bank will depreciate its liquid assets as depositors withdraw cash. For information, reported by OCBC NISP, liquid assets are wealth or property owned by companies or individuals that can be easily converted into cash in a short period of time.
Nevertheless, the Government continues to conduct monitoring to assess the impact of the crisis on a number of banks in the United States (US) for the Indonesian economy. The Ministry of Finance (Kemenkeu) has taken a number of anticipatory steps to deal with the impact of the bank crisis in the US.
The crisis experienced by several banks in the US indirectly created a number of domino effects for the global economy, including Indonesia. The government is also not standing still and in accordance with President Jokowi’s directives to increase awareness of banking conditions in the US which are in a negative phase.
In the midst of various threats and pandemics, wars and other factors, the world recognizes Indonesia’s success in maintaining stable economic conditions. Indonesia’s inflation was only 4 to 5 percent, while the United States’ inflation reached 9 percent.
This was said directly by Professor of the Faculty of Economics, University of Indonesia, Miranda Gultom. According to him in general Indonesia is strong to survive. Throughout the history of the economy in the last few decades, Indonesia’s inflation has never been lower than that of the United States.
Meanwhile the Minister of Finance, Sri Mulyani, has stated that Indonesia’s condition is quite safe. The experience of the financial crisis that Indonesia has experienced has made the country’s financial sector far more prudent than before. This was also confirmed by the Dean of the Faculty of Economics and Business, University of Indonesia, Dr. Teguh Dartanto, Ph.D.
According to Dr. Teguh, the financial sector in Indonesia is far more prudent 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. Besides that, the experience of the financial crisis in 2008, where there was a bank collapse in America which had an impact on Indonesia and other countries.
Almost the whole world recognizes that Indonesia recognizes good financial and fiscal policies. Indonesia is one of the few countries that, during the pandemic from 2020 to 2022, did not experience a drop in economic growth much less than expected. He added that Indonesia has become one of the best economies, which has performed quite well in its performance during the pandemic.
Teguh said that there were two factors that influenced Indonesia’s success in overcoming the economic crisis, namely good policy and good luck. Indonesia can properly control issues related to finance and policies in the real sector are quite controlled.
He continued that interestingly, this is the coordination of the fiscal sector, the monetary sector, and the financial sector. 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.
Chairman of the Bank Indonesia Supervision Agency, Muhammad Edhie Purnawan, Ph.D, said the following, if you look 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. There is also a poultry dry index which shows improvement.
If you look at the forecast a few months ago, that the world economy will go dark in 2023, it looks hopefully better. Even though we know there has been some turmoil in banking in America these past few days.
Bankruptcy of banks in the United States should not need to be treated excessively even though we need to always be introspective. Not to forget, the public needs to give the highest appreciation to the ranks of the Ministry of Finance who have made their maximum efforts in anticipating various economic crises due to global uncertainty. With the support of the community, it is hoped that Indonesia’s economic growth will remain high and surpass that of other countries.