G20's Commitment NOT to Affect Indonesian Banks

Jakarta, Indonesia (News Today) - Bank Indonesia Deputy Governor Halim Alamsyah said G-20 countries’ commitment to reform their financial system would not affect programs and policies that have been or will be carried out by the central bank.

He made the statement at a press conference along with finance minister Agus Martowardojo at the finance ministry here on Wednesday when explaining the results of the recent G-20 Summit in Toronto, Canada, and their impact on Indonesia. With regard to the financial sector the G-20 leaders among others have called for an increase in the quality of banking capital and liquidity, he said.

"G-20 proposes tier 1 banking capital of between four to eight percent while our tier 1 average banking capital is already 12 percent. Indeed some banks have tier 1 capital of 6 to 7 percent but it will not be a problem if the regulation will be implemented," he said.

Halim who participated in the G-20 meetings along with minister Agus Martowardojo said to improve the quality of liquidity the national banks would not have problems because the quality of their liquidity for the short-term period had been quite good and abundant.

"So if 2012 will be set to be the date for its implementation it would not be a problem for Indonesia because our banks are strong and based upon the exercises that we have done it would not affect out financial sector," he said.

Halim said G20 had also given laxity for the implementation of policy, depending upon the condition in the member countries concerned.

"From BI’s perspective, we wish to implement the Basel Two regulation at the end of 2010," he said.

The finance minister meanwhile said he would continue safeguarding the budget deficit in line with the needs that have been determined.

"The G20’s committment would disrupt our budget plans that have been arranged to make fiscal and monetary needs remain healthy," he said.

Source : kompas

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