REPUBLIKA.CO.ID, JAKARTA -- Indonesia's financial system remained stable in the first quarter of 2016 and things remained under control, according to the Financial System Stability Committee (KSSK).

Even though things remained under control, the country still needs to stay alert on account of a number of global and domestic risks, it added.

"In the past three months, monetary and fiscal conditions as well financial sector supervision and deposit guarantee remained under control," Finance Minister Bambang Brodjonegoro said after chairing a KSSK meeting here on Friday.

This was KSSK's maiden meeting after the dissolution of the Financial System Stability Committee Forum (FKSSK) and the establishment of the KSSK, based on Law No.9/2016 on Prevention and Handling of Financial System Crisis (PPKSK).

The KSSK members include the finance minister, who is also the coordinator, the governor of Bank Indonesia (BI), the chairman of the Financial Service Authority (OJK) and the chairman of the Board of Commissioners of the Deposit Guarantee Institute (LPS).

In its first meeting, the KSSK discussed issues related to the financial system's stability, the 2016 work plan and preparations to conduct the Financial Sector Assessment Program (FSAP) in September 2016.

The FSAP comprehensively assesses the development and resilience of the national financial sector on order to implement Indonesia's commitment as a member of the G20.

This will be the second FSAP. Last time, it was conducted in 2010.

"We agreed to conduct a pilot run in order to implement the Law on PPKSK, and this will help us plug any lacunae by paying extra attention. This should be done as soon as possible. We will also make an assessment of the financial system's stability," Bambang informed.

As for its work plan, the KSSK will meet every three months, with the next meeting scheduled for July 28, 2016. It will also formulate a code of ethics and a working system for the secretariat.

The KSSK will also launch a program to make people, particularly financial sector players, aware about the Law on PPKSK and will coordinate with all stakeholders to implement it.

OJK chairman Muliaman Hadad also explained how the country's financial system was stable even though the growth of banking credit declined in the first quarter of 2016, compared to the previous quarter.

"The decline in the credit growth in the first quarter of 2016 induced some cynicism but we hope things will recover in the next quarter. The increasing economic growth will need a higher growth in credit expansion, particularly in the third and fourth quarters," Muliman hoped.

Bank Indonesia Governor Agus Martowardojo, meanwhile, said the threat of sudden reversal of capital still looms, and could influence the performance of the current transactions. Also, there are external debt management risk that non-banking companies face. Yet overall, the financial system stability conditions are under control.

"BI has issued regulation on prudent principles with regard to debts. Based on monitoring over the past four quarters, conditions remained under control and the country does not face any risk threat that could need extra attention," noted Agus.

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