building resilient financial institutions. the first element of reforms centered on the basel iii package. the quality and level of capital has been increased and new standards for liquidity has been introduced. in addition, leverage has been constrained and explicit macroprudential dimension has been introduced. 7. although we started a year late, basel iii implementation in indonesia has been in accordance with bcbs phase - in arrangements since 2014. i am pleased to inform you that indonesian banks are not facing significant challenges, especially with regards to the capital reform, due to the high levels of capital ratio dominated by common equity tier 1. indonesia has also 2 of 6 implemented the countercyclical capital buffer and capital conservation buffer in addition to the minimum capital requirement. 8. in terms of liquidity coverage ratio, banks that are required to adopt the standard have no major difficulties complying. nonetheless, we continued to monitor the long run impact of the requirement. 9. ending too - big - to - fail. the next core element is ending too - bigto - fail. a set of measures, known as the systemically important financial institutions ( sifi ) framework, has been introduced. 10. although indonesia is not home jurisdiction of the global systemically important banks, a number of domestic banks are required to meet capital surcharge that varies between 1 % to 2. 5 % to reflect their systemic importance in the domestic financial system. 11. indonesia has also passed the law on prevention and resolution of financial system crisis in april 2016. the law enables related financial stability authorities to implement a more rigorous banking regulation and supervision, particulary for domestic systemically important banks, including the provision of recovery plans. it also provides legal foundation of bail - in mechanism. ladies and gentlemen, 12. making derivatives markets safer. the third fundamental area of reform is in the otc derivatives market. the crisis highlighted how the opaque inter - connections across financial institutions engaged in trading complex derivative contracts over - the - counter and poor risk management led to rapid contagion and systemic crisis. 3 of 6 13. the reform has focused on 5 ( five ) areas : standardization of derivative contracts ; platform trading ; central clearing ; higher margin and capital requirements for non - centrally cleared trades ; and mandatory reporting of all trades. indonesia has implemented reporting requirement for banks engaging in otc derivatives transactions. in addition, platform trading are required for both equities and commodities derivatives. national authorities are also in the proceses of establishing a ccp

car ) was recorded at 17. 2 % at end of october 2011. despite pressures on domestic foreign exchange market, the rupiah liquidity condition in the interbank money market ( puab ) remains unaffected, while banking liquidity also continues to be adequate. third party fund ( dpk ) in 2011 ( up the october ) grew 19, 0 % yoy, while ratio of liquid assets to non - core deposits was kept above 100 % ( 182. 0 % ) as of october 2011. the banking intermediation function is managed to run as planned. in 2011 credit growth reached 25. 7 % ( yoy ), while loan to deposit ratio ( ldr ) rose to 81. 4 % as of october 2011 from 75. 5 % at end 2010. the quality of the credit growth escalates as credit to productive sectors increases reflected by growth of investment credit that reached 31 % as of october 2011. in addition to the enhanced ability to absorb risks, our banking industry is also able to gain large amount of profit, in fact the largest among asean countries. in october 2011, return on assets ( roa ) of the banking industry stood at 3. 11 %, far above asean average of 1. 14 %. meanwhile, for islamic banking, based on a survey conducted by bmb islamic finance, islamic business and management consultancy based in london, indonesia islamic financial industry occupied the 4th position in the world after iran, malaysia and saudi arabia. indeed, this is a very satisfactory achievement. in september 2011, total assets of islamic banking has reached rp 126, 6 trillion or 3. 8 % of total national banking assets, grew by 47. 8 % ( yoy ) and the highest in the last 3 years. the average car of islamic banks ( bus ) and sharia unit ( uus ) grew at 16 %, while the average capital adequacy ratio ( car ) of islamic rural bank ( bprs ) 24. 7 %. in the rural banks group, in late october 2011 a year on year assets grew by 20. 56 %, credit 20. 96 %, third party fund ( dpk ) 21. 31 %, and the number of deposit accounts grew 9. 72 %, while capital adequacy ratio ( car ), in late october 2011 grew 28, 58 %. distinguished guests, ladies, and gentlemen, i view the positive achievement of the national economy in 2011 as a result of hard work and strong cooperation