Indonesia’s credit growth outrunning risk management
Economic growth has leapt ahead of Indonesian banks’ ability to assess the credit risk they are being exposed to – but with the central bank finally implementing Basel II is there a regulatory solution to these problems?
Earlier this year, Indonesia finally completed the last part of its Basel II regulatory framework. Banks are putting in place a standardised approach to credit risk management as outlined by Bank Indonesia in January 2012.
Most economists and rating agencies rate Indonesia's macro environment and banking sector as stable, with banks well-capitalised and GDP set to increase by upwards of 6% this year. The government has taken huge strides in improving financial discipline since the Asian
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