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Financial market needs catalyst to catch up with region: BI
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Bank Indonesia governor Agus Martowardojo delivers his remarks at the Executives' Meeting of Asia Pacific Central Banks (EMEAP) in Bali on Aug. 1. (Courtesy of Bank Indonesia/-)
D
espite being Southeast Asia’s largest market, the nation’s financial market has developed a lot slower than its regional peers in the last decade, prompting need for a catalyst to catch up.
During the opening of the international seminar titled ‘Financial Market Deepening 2016: The Way Forward for Indonesia’, Bank Indonesia (BI) governor Agus Martowodojo acknowledged the slow development of Indonesia’s financial market compared to other countries in the region.
The slow development has polarized financing of the banking industry, resulting in limited access for borrowers and investors to tap alternative financing and investment.
"This phenomenon shows that Indonesia has not been able to take advantage of financial markets as the driving force of the economy," Agus said in Jakarta on Monday.
This situation, he continued, had prompted the need for market deepening to create alternative funding outside the banking sector, both for short term and long-term financing needs. He believed deepening of the financial market would ultimately boost the economy.
"One option to address this issue is to optimize the development of direct financing to lenders or investors, through various financial market instruments, expanding the base of market participants and also developing market infrastructure," Agus said. (ags)
