IMF reminds Indonesia to balance financial deepening and stability
Financial development in Indonesia has evolved at a relatively slow speed in comparison to peer countries. Although this provides opportunities for financial deepening, the International Monetary Fund has been quick to remind Indonesia that deepening should be balanced with stability to avoid a crisis. “There is evidence that too fast a pace of financial development leads to instability,” IMF Mission Chief for Indonesia, Luis E. Breuer, said during the International Seminar on Financial Market Deepening 2016: The Way Forward for Indonesia in Jakarta on September 19. IMF data shows that credit booms in Thailand, Argentina, Uruguay, Greece and Brazil were followed by banking crises. Therefore, he suggests regulatory reform as a method of promoting financial development and stability simultaneously.
