Jakarta –
The Financial Services Authority (OJK) assesses the closure Silicon Valley Bank (SVB) by the United States Federal Deposit Insurance Corporation (FDIC) on March 10, 2023 will not have a direct impact on the Indonesian banking industry.
According to OJK Banking Supervision Chief Executive Dian Ediana Rae, the closure of SVB is not expected to have a direct impact on Indonesian banks, which do not have business relationships, facility lines or investments in SVB securitization products.
In addition, unlike SVB and banking in the US in general, banks in Indonesia do not provide credit and investment to technology startups or crypto companies.
“Therefore, OJK hopes that society and industry will not be affected by various speculations that are developing among the public,” said Dian in a written statement, Monday (13/3/2023).
Dian explained that after the 1998 financial crisis, Indonesia had taken fundamental steps in the framework of strengthening institutions, legal infrastructure and strengthening governance and customer protection which had created a strong, resilient and stable banking system.
This, according to Dian, is reflected in the well-maintained and solid performance of the banking industry, which continues to grow positively amidst the ongoing domestic and global economic pressures.
At present, the condition of Indonesian banking shows good liquidity performance, including LA/NCD and AL/DPK above the threshold of 129.64 percent and 29.13 percent, far above the regulatory threshold of 50 percent and 10 percent respectively.
Banking assets are also maintained at a proportionate composition with the composition of Third Party Funds (DPK) which are dominated by current accounts and saving accounts (CASA) or low-cost funds which are increasing so that they are not sensitive to movements in interest rates.
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