He said in his speech at the Indonesia Banking Expo 2013 that the country would not have banks that could support its growth and development unless they have quite strong capital.
Boediono said banks could seek additional capital at home and abroad to equal that of their foreign rivals.
He said this was important to meet the integration of the financial sector following the implementation of the ASEAN Economic Community by 2020.
Vice President Boediono said the country`s banks must be able to meet competition in the MEA well in cooperation with the regulator and the government.
"There must be no space between banks, the regulator and the government. They must be united to meet foreign banks that would come through the MEA. The competition must be met fairly as without competition we would only become weak players," the former central bank governor said.
The vice president, who is an economic professor, said banks and business sectors must be masters in their own country and must be able to take the benefit of the openness offered through the MEA by adhering to agreements that have been made by members of the Association of Southeast Asian Nations.
"Becoming masters in their own country is the main priority while securing a foreign market will be more difficult," he said.
Vice President Boediono hoped from the IBEX 2013 bankers could give inputs to the government with regard to things needed to prepare the country`s financial sector ahead of the MEA.
"There is still a room before the MEA is implemented in 2020. The coordinating minister for economic affairs could follow the issue in line with the President`s instruction," he said.
(Reporting by T.R.P.A. Jingga/H-YH)