Sri Mulyani Reminds ASEAN About The Vulnerability Of The Financial Sector Crisis

Illustration (Photo: Doc. Ministry of Foreign Affairs)

Minister of Finance (Menkeu) Sri Mulyani revealed that the economic crisis that occurred in 1997-1998 had provided a very valuable lesson for Indonesia and many countries in Asia. This statement was made by the Minister of Finance when speaking at the Gala Seminar Indonesia 2023 ASEAN Chairmanship in Bali.

"I remind all ASEAN countries to be prepared to face crisis vulnerabilities in the financial sector, including Indonesia," he said in a written message on Wednesday, March 29.

According to the Minister of Finance, the regulations in question include the prudential banking regulation, capital market, and the implementation of non-bank financial institutions. In addition, the central bank has also become independent and has a credible inflation target.

"ASEAN as one of the areas that attracts a lot of short-term and long-term capital can also create several possible behaviors at the micro-level such as corporations, banks, or financial institutions that may trigger a crisis situation," he said.

For this reason, continued the Minister of Finance, in facing this risk, cooperation between its members is needed to detect early on the signals that appear.

"One of the most important things is whether you can really detect these risks from an early age and then deal with these risks quite effectively," he stressed.

To note, the 1997-1998 financial crisis prompted ASEAN to issue an IDX Mai initiative which became a regional financial safety net to create certain disciplines to prevent a crisis from appearing.