more effective. home ownership and equity protection act i would now like to turn to important new consumer protections that the federal reserve board adopted earlier this week. these new rules, which implement hoepa, were put into place to protect consumers and to help prevent a recurrence of the problems that we are now facing. the current wave of foreclosures is taking a very real toll on families and their communities, no place more so than in predominantly minority communities, where subprime loans were particularly common. the u. s. mortgage market has seen rapid innovation in recent years. changes, such as automated underwriting models, the evolution of the secondary markets, and specialization, have had many positive effects. some changes in practices, however, have not been so salutary. abusive loans that strip borrowers'equity or cause them to lose their homes should not be tolerated. too many homeowners and communities are suffering today because of these practices, and the federal reserve board's rules will better protect consumers while preserving their access to credit as they make some of the most important financial decisions of their lives. last december, the board proposed changes using our authority under the home ownership and equity protection act. in formulating that proposal, the board sought a wide range of input and information through hearings and meetings throughout the country. in response, we received, and considered, over 4, 500 comment letters sent to us from community groups, industry participants, consumer advocates, and other interested individuals. we engaged in outreach to commenters to get clarification of their concerns and weigh competing viewpoints. we gathered available data and conducted updated analyses. we undertook onthe - ground consumer testing, which has proven to be an invaluable tool for us in determining policy effectiveness, to gauge the practical effects of one of the proposed rules on individual consumers. listening carefully to the commenters, collecting and analyzing data, and undertaking consumer testing, i believe, have led to more - effective and improved final rules. our goal throughout this process has been to protect borrowers from practices that are unfair or deceptive and to preserve the availability of credit from responsible mortgage lenders. these rules expand upon interagency guidance issued last year on subprime loans. that guidance, however, only focused on certain specific subprime products, hybrid adjustablerate mortgages, such as so called 2 / 28s and 3 / 27s, and only applied to federally supervised institutions. our rules now apply

##pate ourselves from the shackles of this crisis, fiscal stimuli have to be introduced concomitantly with financial sector strengthening. fiscal stimuli are basically a way to prime the pumps. they will not catalyze sustainable economic growth if not buttressed by a reawakening of private and business sector activities. furthermore, the private sector will only be roused if supported by a fully functioning financial sector. as such, measures to repair and reinforce our financial sector must be taken along with the introduction of fiscal stimuli. in our great nation, banks remain a reliable source of financing for the business sector, and thus, tidying up and strengthening our banking sector must remain a priority for continuous implementation. within its authority but constrained by capacity limits, bank indonesia will take any and all measures required to attain this target. for a developing country such as indonesia, i would like to add one more ingredient to bernanke ’ s recipe ; that is we also have to perform structural reforms to remove the obstacles to business activity. lessons learned distinguished guests, experience is the best teacher in life. the ongoing global crisis provides valuable lessons for our future endeavors. allow me to highlight a few. a simple lesson learned from this crisis is the importance of going back to basics. let us view the reason. the current crisis can be seen as a consequence of financial sector development that is detached from its roots, which is real economic activity. expansive development of the financial sector in many countries for over a decade has stemmed from financial product innovation as well as the great strides made in financial institutions. such innovative growth has been made possible by the revolution in information technology and global financial liberalization. the financial sector in many countries has attracted many people, including the best and the brightest, as it is often a fast track to wealth and riches. those who are skillful, innovative and dare to take risk can receive a befitting reward. financial products that have become more varied, more sophisticated and more complex have a fatal side effect, namely that the inherent risks are more difficult to assess. financial instruments are becoming separated from underlying transactions that should form their base and have developed into bubbles. due to their internal dynamics, the bubbles are swelling and many have finally burst, which precipitated this crisis. in short, the ongoing crisis is basically a consequence of failed risk management, both at the micro and macro levels. back to basics applies to all financial institutions, particularly banks. the main role of banks is to facilitate and finance