and accounting and legal experts. this program will be distinct from the activities of on - site examination teams so as to provide an independent supervisory perspective, as well as to complement the work of those teams. as we adapt our internal organization of supervisory activities to build on lessons learned from the current crisis, we are using all of the information and insight that the analytic abilities the federal reserve can bring to bear in financial supervision. conclusion a year ago, the world financial system was profoundly shaken by the failures and other serious problems at large financial institutions here and abroad. significant credit and liquidity problems that had been building since early 2007 turned into a full - blown panic with adverse consequences for the real economy. the deterioration in production and employment, in turn, exacerbated problems for the financial sector. it will take time for the banking industry to work through these challenges and to fully recover and serve as a source of strength for the real economy. while there have been some positive signals of late, the financial system remains fragile and key trouble spots remain, such as cre. we are working with financial institutions to ensure that they improve their riskmanagement and capital planning practices, and we are also improving our own supervisory processes in light of key lessons learned. of course, we are also committed to working with the other banking agencies and the congress to ensure a strong and stable financial system.

##interrupted cash and non - cash payment system. in terms of the non - cash payment system, bank indonesia tireless strives towards a less cash society ( lcs ), namely encouraging the general public towards a proclivity for non - cash payment instruments. to that end, bank indonesia recently launched a national non - cash movement in order to expedite the proliferation of non - cash transactions. 16. payment ( retail ) transactions in indonesia are currently dominated by cash - based transactions. weak public understanding concerning the existence and use of non - cash payment methods, coupled with limited quality infrastructure, forces the public to favour cash - based transactions for their daily activity. 17. a survey conducted by mckinsey & company ( 2013 ) revealed that in comparison to its peer countries, the use of cash for retail transactions in indonesia remains dominant at 99. 4 %. the dominant use of cash is a consequence of risk and rupiah management costs. statistics show that each year the amount of currency in circulation grows by around 15 %, far exceeding population growth at around 2 – 3 % and gdp growth of around 5 – 6 %. a less cash society is expected to precipitate bis central bankers ’ speeches more balanced growth with more widespread use of non - cash payment instruments amongst the public. 18. the national non - cash movement is critical to hasten the realisation of a more efficient economy as well as better governance in terms of financial management amongst the public, business players and government institutions. to ensure a more effective programme, the national non - cash movement is run in synergy with various ministerial and provincial government programmes through the application of e - government and e - payment. ladies and gentlemen ; 19. a key determinant of a less cash society is a sense of security for all stakeholders when conducting non - cash transactions, in particular protection from criminality by unauthorised parties. this was confirmed by a bank indonesia survey, which found that security when conducting non - cash transactions is the main factor cited by the general public, followed by convenience and interoperability amongst financial service providers. 20. in order to combat potential criminality, the intensive handling of suspected crimes is paramount. solid coordination and consolidation between the relevant authorities and law enforcement is expected to prevent and minimise various payment system and currency exchange crimes. furthermore, the imposition of stringent sanctions will act as a deterrent to potential criminals. 21. sound coordination and cooperation is required in the