We do not have the time to go through the usual motion resulting in the nation back to square one after, say, 3 months. All the usual players, legislators, policymakers and the commentariat ranks need to start from the same page. The stakes are frankly too high to continue play politics as usual. If there is a time to play as a team, this is it. Where is the Lembaga Penjamin? Where is the DPP Real Estate Indonesia ?
The reality is though that with the elections around the corner, there is a possibility that , in fact, it will be politics as usual. The MPs will play safe and not taking any risks with a potentially budget busting policies. The central bank and the financial institutions are probably reluctant to support any monetary expansion by a (potentially) lameduck administration.
Short of suggesting all the stakeholders is in need of changes of their living organ inside of their cranial, it does not appear there is much that can be done overnight.
So what is there that can be done ? This newspaper has a few suggestions :
1)The central bank to impose a new policy disincentivising the banking industry to extend loans to the people who can not have a mortgage. This newspaper does not have access to the extent to which mortgage accounts for banking loans but it may be quite significant.
2)The central bank to increase the industry's capital adequacy ratio (CAR) for a definite period of time. This additional breathing space can be used for the central bank either to nudge banks to conduct self audit or if forced to externally audit the suspected banks.
3)Commission a quick study to get a feel of the interconnectedness between the local portfolio and those of the now infamous CDs and all the other exotic acronyms spewn by the U.S.
It is your correspondent's fervent hope and wishes that our country and tax payers like you and me do not need to bear the burden of a bailout to help the fat cats who were grossly overpaid and grossly incompetent.
Posts
4 comments:
Mas Iwan,
Good suggestions in terms of monetary aspect.
Nevertheless, if Yudhoyono administration would like to be granted a second term in office, it too, must act.
On the other hand,
Interesting to observe that whilst several central banks cut interest rate, our own decided to raise it. The macro-economy text book might refer to "controlling inflation" as the factor. What do you think?
I agree. Ada dua hal yang "necessary" tapi tidak sufficient:
1)Necessary untuk dear president tdk terlalu lama ambil keputusan.
2)Necessary untuk lihat what additional efforts yang bisa coordinated with other central banks.
The above tidak sufficient karena I fear sekarang investors di seluruh dunia do not have any confidence on stock market dan the banking system. As you know trust dan confidence will take time to build. Tp building the trust will be made easier if the necessary conditions are all met. That's why the thinking general need to become the action general :)
Whaddya think ?
Mas Iwan,
The thinking general will never be the action general. He never did, he never is and he never will. :)
Coordinated efforts among central banks is indeed a good way to pursue. I always believe that the whole ASEAN region should integrate within ourselves in terms of monetary policy. This will ensure we gain the same strength as China or India in the future.
not so sure about monetary integration ya. i am no expert jadi what i am going to is based on general knowledge aja. you'll notice bahwa the ECB lacks some of the powers that the Fed had. Ironically the Eurozone appeared to have pulled the plan off better than uncle sam. in addition remember how difficult it was dan kayaknya it still is to coordinate monetary policy across europe. spain dan portugal and to some extent italy is in the doldrums so managing the inflation dan budget deficit in these countries proved difficult compared to say irelan during her heydays. actually not sure why i would agree to asean in the first place. what has asean done to people like you and me?arguably none kan.
Post a Comment