ID :
65020
Wed, 06/10/2009 - 10:58
Auther :
Shortlink :
https://www.oananews.org//node/65020
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BI OFFICIAL: INDONESIAN BANKS SAFE
Surabaya, E Java, June 9 (ANTARA) - Indonesian banks are relatively safe in the recent global financial crisis that has affected a number of countries, Bank Indonesia's head of bureau of financial system stability, Dr Wimboh Santoso, said.
"The impact of the crisis did not affect much on the country's economic system because the banking industry remain safe," he said here Tuesday in a seminar on global crisis held by Airlangga University.
He said the phenomena occured because Indonesia was not trapped in a subprime mortgage problem.
"So far banks in the country are focussed on traditional banking businesses and not trapped into investment securities such as shares or others. So we are safe," he said.
Based on data released by Bank Indonesia in April quality of bank assets in the country remained maintained at 17.6 percent although non-performing loans tended to rise.
"Right now the non-performing loans are still normal at below five percent. Compared to the conditions during the crisis in 1997/98 the current conditions are still relatively stable. In the 1997/98 crisit the asset quality was negative," he said.
He said several factors had contributed to making the banking conditions in the country stable among others the regulation banning Indonesian banks to conduct investment in shares.
"Banks have also been directed to conduct other universal banking activities through subsidiaries. Banks in Indonesia are more often investing in real estates or property business," he said.
He said three factors combined to trigger a crisis namely economic agents' behaviour, information gap and financial factor.
In addition there was also a vicious cycle which if ignored could trap the economic system namely depreciation in exchange rates, panicking in the banking sector and a drop in the production sector followed by general economic collapse.***2***
"The impact of the crisis did not affect much on the country's economic system because the banking industry remain safe," he said here Tuesday in a seminar on global crisis held by Airlangga University.
He said the phenomena occured because Indonesia was not trapped in a subprime mortgage problem.
"So far banks in the country are focussed on traditional banking businesses and not trapped into investment securities such as shares or others. So we are safe," he said.
Based on data released by Bank Indonesia in April quality of bank assets in the country remained maintained at 17.6 percent although non-performing loans tended to rise.
"Right now the non-performing loans are still normal at below five percent. Compared to the conditions during the crisis in 1997/98 the current conditions are still relatively stable. In the 1997/98 crisit the asset quality was negative," he said.
He said several factors had contributed to making the banking conditions in the country stable among others the regulation banning Indonesian banks to conduct investment in shares.
"Banks have also been directed to conduct other universal banking activities through subsidiaries. Banks in Indonesia are more often investing in real estates or property business," he said.
He said three factors combined to trigger a crisis namely economic agents' behaviour, information gap and financial factor.
In addition there was also a vicious cycle which if ignored could trap the economic system namely depreciation in exchange rates, panicking in the banking sector and a drop in the production sector followed by general economic collapse.***2***
