No matter what, in relation to this banking issue, we will look at the spillover to the region
Badung, Bali (ANTARA) - ASEAN countries will look at the spillover from the current global banking problems, Deputy Governor of Bank Indonesia (BI) Dody Budy Waluyo stated during a media briefing in Badung, Bali, Monday.

"No matter what, in relation to this banking issue, we will look at the spillover to the region," he remarked.

The fall of global banking began with the collapse of one of the United States (US) Central Banks, Silicon Valley Bank, which affected another US Bank, Signature Bank.

More recently, banks in Europe, such as Credit Suisse (Switzerland) and Deutsche Bank (German), also followed suit.

Thus, the banking issue will be one of the backgrounds for discussion on the global economy at the first ASEAN Finance Ministers and Central Bank Governors meeting during the Indonesian chairmanship.

Other participants at the meeting will comprise several international organizations, such as the International Monetary Fund (IMF), that will raise various global development issues.

ASEAN has a similar interest in maintaining the security of the financial system, so it will continue to think of various methods, whether through capital strengthening or reduction of loans to certain banks, Waluyo stated.

The difficulty lies in seeing how the indirect impact is felt in startups or e-commerce platforms that have taken indirect loans from troubled banks, he remarked.

When there is trouble brewing in developed countries, concerns ride high over whether it will affect developing countries, including the ASEAN nations, in the form of a spillover. This also applies to the current banking issue.

The spillover that will affect the macro economy of a certain region or country comes through capital traffic, liquidity, to the exchange rate.

Meanwhile, the defense and security aspects of the financial sector may be affected by the spillover.

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Translator: Agatha O V, Fadhli Ruhman
Editor: Sri Haryati
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