JAKARTA - Finance Minister Sri Mulyani opened her voice about the Silicon Valley Bank (SVB) which experienced bankruptcy on Friday, March 10.
According to Sri Mulyani, SVB is a small late bank with assets worth 200 billion US dollars when compared to total US banking assets which reached 1.3 quadrillion US dollars.
"What we have to watch out for now is that global market conidies such as relatively small SVB closures, regional banks with only 200 billion assets, for America this is very small. It has caused very significant shocks in terms of deposit confidence in the US," Sri Mulyani said at a press conference at the Ministry of Finance Building, Tuesday, March 14.
With the shock caused by SVB, the American government, which previously did not bail out, then decided to bail out and guaranteed all deposits from SVB.
"This is certainly a lesson we need to see. A small bank in a certain position can create a systemic perception," continued Sri Mulyani.
Sri Mulyani also explained that many initial analyzes arose regarding the cause of the bank from America going out of business, among others, because SVB specifically funded startups, while many startups experienced a very deep decline in performance in 2022.
"It can be seen from various indicators which then pose a threat to the distribution of deposit funds which has increased very high. So credit performance has decreased," he explained.
Second, he continued, SVB experienced an increase from deposits of more than 3 times in less than 2 years.
According to him, this deposit is very large but its distribution to credit has been restrained because the performance of the declining stratup is very significant, causing the balance sheet condition to be under pressure.
"On the other hand, high deposits were bought by SBN America, which has a long term and SBN has decreased in value due to the interest rate from the Fed which has increased. So if the interest rate increases, the SBN price will experience a correction," explained Sri Mulyani.
For this reason, he continued, the government will also remain vigilant because transmission from perceptions and psychology caused by banks that cannot create a significant situation for the financial sector.
"Indonesia, Alhamdulillah, it is still in a fairly good situation, judging from the movement of the exchange rate and also the capital flow to emerging markets, where iIdonesia sees the flow of capital to Indonesia," concluded Sri Mulyani.
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