governor ’ s address optimizing potential, strengthening resilience bank indonesia ’ s annual meeting jakarta, november 22nd 2016 table of contents greetings............................................................................................................................................. preface................................................................................................................................................. developments in global economies......................................................................................... developments in domestic economy.......................................................................................

cooperation, particularly with countries within the region. this bilateral cooperation seeks to promote transaction settlements in the domestic financial market by using local currency in international trade and investment transactions. bank indonesia will also embark on a number of priority initiatives to accelerate the deepening of the financial markets. first is through optimizing potential, strengthening resilience bank indonesia ’ s annual meeting 2016 the development of money market instruments, foreign exchange markets, and strengthening coordination with relevant authorities in order to develop capital market instruments, such as infrastructure bonds. second is by inreasing financial market participants, particularly through increased use of repo transactions by financial institutions, banks and non - banks. third is through the development of infrastructure in order to reduce segmentation and strengthen risk mitigation in financial transactions. to support these priority initiatives, bank indonesia will accelerate the follow up of two strategic financial market deepening issues that require support from the related authorities. the first is to align tax regulations governing financial market instruments to support the development of the financial market. secondly, seek to align financial market development initiatives by implementing prudent financial institution practices. bank indonesia views these two issues as strategic as it is not enough for financial institutions to be merely safe and sound, but they must also fairly developed through growing activities in the financial markets. therefore, we hope that the commitment between the ministry of finance and the financial services authority ( ojk ) to share a common vision to develop the financial market under development financing coordination through the financial markets forum ( fk - ppk ). macro prudential policy in 2017 will constantly be directed towards maintaining the financial system ’ s resilience. apart from macro prudential regulations on banking industry, bank indonesia will strengthen assessment and surveillance of financial system participants, not only financial services institutions but also the users of financial services such as corporations. in this regard, bank indonesia will strengthen and expand its macro prudential surveillance coverage towards households, corporations and non - financial corporate groups. the results of our assessment shows that non - financial corporate ’ s weak performance can result in potential risks to the financial system, particularly banking. for that purpose, macro prudential surveillance needs to be strengthened in order to be able to identify at an early stage the source of the risk and the relationship of nonfinancial corporate risk with other participants in the financial system, particularly banking. risk monitoring outside the banking sector has also become increasingly vital in line with the development of financial technology ( fintech ). in this regard,