Jakarta (ANTARA) - Institute for Development of Economics and Finance's (INDEF's) senior economist Aviliani believes that Indonesia can, in fact, stand to benefit from the closure of the Silicon Valley Bank (SVB) by the California banking regulators.

"We should benefit because when a country experiences a financial crisis, the money can flow to Indonesia," Aviliani stated at the 2023 Fortune Indonesia Summit here on Wednesday.

The senior economist remarked that Indonesia's current financial system is still stable, so it needs to be maintained to avoid being affected by the SVB closure.

Indonesia has been strengthening its financial system stability since the 1998 financial crisis, she pointed out.

"Bank Indonesia's benchmark interest rate is still safe, and surveillance by the Financial Services Authority (OJK) of our financial system is better than in developed countries. This means that we are in a better place due to experiencing the 1998 (crisis), and our (financial) supervisors are much better," she explained.

Meanwhile, the implementation of Law No. 4 of 2023 concerning the Financial Sector Development and Strengthening (P2SK) Law will further strengthen financial system stability through various new provisions, one of which is expanding the authority of the Deposit Insurance Corporation (LPS).

"LPS not only protects public funds but also provides solutions. They can help troubled banks," Aviliani remarked.

She called for the need to maintain public perception, so that it does not impact the financial system and economic stability in 2023.

"If people's perceptions are good, and they contribute to the economy with balanced consumption and investment, then we will not experience an economic crisis," she explained.

Earlier, on Tuesday (March 14), Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan expressed belief that the SVB closure on March 10 would not have an impact on Indonesian banks.

"Until today, we do not see any signs that it will have an impact (on Indonesia) because it seems that the capital of our banks is great," Pandjaitan stated at the Indonesia Leading Economic Forum 2023 themed "Strengthening the Economic Climate Amid the Global Polycrisis Era."

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Translator: Sanya S, Kenzu
Editor: Azis Kurmala
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