The 1998 and 2008 crises were caused by financial problems, while the recent COVID-19 pandemic crisis resulted from issues in other sectors that eventually affected the financial sector.
"I think that professionals, especially younger professionals, need to understand why the financial sector can cause crises and why it can be severely affected by a health crisis," Mulyani remarked in Jakarta on Tuesday.
She made the statement during the opening ceremony and panel discussion of the 2023 Financial Professionals Association Expo, which was monitored online in Jakarta on Tuesday.
The 1998 monetary crisis and the 2008 global financial crisis were both driven by miscalculations made by financial professionals, she said.
Essentially, she remarked that those pursuing a career in the financial sector must possess the capability of presenting information, data, and facts, as well as conducting analysis on the quality of a financial transaction.
However, as the economy becomes more complex and modern, financial professionals need to conduct deeper analyses and make more meticulous decisions, she said.
"We can still deal with the problems resulting from a mistake made by one accounting firm. However, a mistake made by the whole industry indicates that there was an error in the valuation. This is what we refer to as a bubble in economic terms," she noted.
She said that the economic bubble may cause the economy to become vulnerable to a collapse.
"It is clear that all crises, starting from micro-level ones within a company to broader crises, are the results of chaotic balance sheets and income statements," she remarked.
Hence, Mulyani underlined the importance of the capability of financial professionals in ensuring the growth and sustainability of a country's economy.
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Translator: Imamatul Silfia, Tegar Nurfitra
Editor: Anton Santoso
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