'€œCurrently, I can confirm that no bank will be closed. There is also no bank threatened with closure or threatened with failure,'€ he said as quoted by Antara in Jakarta on Thursday.

Heru said that after conducting a stress test, the LPS had concluded that currently, there was nothing that could cause an excessive fluctuation in the banking sector, despite existing non-performing loan pressures.

'€œOverall, it is unlikely that there will be anything fluctuating a lot in the banking sector. We are going to carry out more stress tests in the future and look at worst case scenarios in anticipating change. However, it is clear that our banking conditions are fairly good,'€ he said.

In the first semester of 2015, Heru said, only two credit banks were forced to close down. Their closures, he said, were due to internal moral hazards and not the economic slowdown.

'€œThe two banks, which were located in Central Java and Sumatra, had to cease operations because their assets fell to less than Rp 10 billion (US$730,000). The closures were triggered by internal moral hazards and were nothing to do with economic issues,'€ he said.

Therefore, Heru said, Indonesian people should not be reactive in the face of economic fluctuations related to the weakening rupiah and the country'€™s economic slowdown. He said there had been no indication that the ongoing pressures Indonesia was facing would have a severe negative impact on the national economic condition.

Heru confirmed that the LPS would guarantee the savings of all banking customers '€“ now 156 million people. He said the LPS would also maintain people'€™s confidence toward the work performance and resilience of Indonesia'€™s banking sector amid the ongoing crisis.

'€œOf course, we will stay alert and remain concerned about the current situation and at the same time, take the best steps we can. We will make sure that the LPS'€™ liquidity is adequate, even if we have to borrow money from the government, because [liquidity] is a crucial aspect,'€ said Heru.

The LPS continued to push for the completion of the Financial System Safety Net (JPSK) bill so that Indonesia would have protocols in place and could anticipate a crisis and thus protect Indonesia'€™s banking system if one occurred. (ebf)(+++)

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