Horror! The 2008 American Crisis Due To The Property Business, Don't Let Indonesia Get The Same Problem

Illustration (Photo: Doc. Antara)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani hopes that the government's efforts to encourage the domestic housing business will not be followed by negative excesses that could threaten the economy. According to the Minister of Finance, the incident that did not wear was experienced by the superpower United States (US) several years ago.

He said the US property business development scheme was the main trigger for the financial crisis which had a significant impact on the economy.

“In 2008/2009 in the United States there was a crisis, where they no longer knew what assets were in their security system. In fact, they cannot trace the risk of these assets," he said at the G20 dialogue forum held by PT Sarana Multigriya Finansia (SMF) on Wednesday, July 6.

For this reason, the Minister of Finance wants all stakeholders involved in this business sector to fully understand the risks and economic potential contained in it.

"We hope that Indonesia learns from this case. But we can also see opportunities for assets to be securitized,” he said.

For information, the 2008 crisis in the US was triggered by the bankruptcy of one of the largest investment banks, namely Lehman Brothers. At that time, Lehman Brothers made an offer to the community to own a house even though they did not have a steady income and credit experience.

This has made many people who have received financial assistance from the government to participate in the US mortgage program. When the disbursement of funds from the government falters, creditors also fail to pay.

The situation got more complicated when the US central bank, The Federal Reserve aka The Fed, raised its benchmark interest rate which made the interest burden heavier. Is the problem solved? Turns out not yet.

Lehman Brothers is known to have securitized the housing assets to get fresh funds from the financial market. Because the property business is 'in ruins', many investors are panicking.

In fact, this panic then spread throughout the world's financial markets, causing a domino effect and triggering crises in various countries.