than other parts of the financial system. given banks ’ pivotal role as both financial intermediaries and providers of payment facilities, problems with one institution can easily cause contagion effects. central banks have an important task in mitigating these risks by offering secure payment settlement systems through which payments can be made in risk - free money. this also implies that central banks need to monitor their commercial counterparts intensively. at the same time, we cannot ignore the fact that commercial banks have become more exposed to other parts of the financial system, implying that our surveillance task should be broadened. for example, banks ’ increasing use of credit derivatives to transfer their risks to institutional investors, implies that these investors ’ ability to meet these financial contracts becomes a relevant factor. let me elaborate a bit on this new development in central banking, and how we deal with it at the nederlandsche bank. what do we mean by financial stability? according to our own definition at the nederlandsche bank, a stable financial system is capable of efficiently allocating resources and absorbing shocks, preventing these from having a disruptive effect on the real economy or on other financial systems. also, the system itself should not be a source of shocks. our definition thus implies that that money can properly carry out its functions as a means of payment and as a unit of account, while the financial system as a whole can adequately perform its role of mobilising savings, diversifying risks and allocating resources. financial stability is a vital condition for economic growth, as most transactions in the real economy are settled through the financial system. the importance of financial stability is perhaps most visible in situations of financial instability. for example, banks may be reluctant to finance profitable projects, asset prices may deviate excessively from their underlying intrinsic values, or payments may not be settled in time. in extreme cases, financial instability may even lead to bank runs, hyperinflation, or a stock market crash. how can we safeguard financial stability? although this concept is hard to capture by clear and observable targets, our definition of financial stability gives some clues. let me mention three. first of all, potential sources of shocks need to be identified. examples of shocks are interest rate hikes, financial crises in other systems, but also non - economic events like earthquakes and terrorist actions. obviously, shocks are hard to predict, but having some idea of their potential magnitude is useful for making financial systems more resilient. a second factor to look into

olaf sleijpen : the rise to economic leadership - indonesia's development from the perspective of the dutch central bank speech by mr olaf sleijpen, executive board member of monetary affairs and financial stability of the netherlands bank, at the indonesia - netherlands trade, tourism, and investment forum, amsterdam, 28 may 2024. * * * your excellencies, ladies and gentlemen, it is a great honour to speak at the indonesia - netherlands trade, tourism, and investment forum. indonesia is a very important and close partner of the netherlands, so it feels good to meet with you here. terima kasih [ thank you ]. nearly 700 years ago, before modern - style banks existed, people stored their money at home. rather than metal containers, they used common kitchen jars made from a cheap orange - colour clay called'pygg '. whenever families had money left over, they would save their coins in these clay jars, known as'pygg pots.'the first true piggy banks originated in java as far back as the 13th century. they were made of terracotta and shaped like pigs, with a slot on top for depositing coins. few of these piggy banks, known as " celengan " in javanese, survived as they had to be demolished to retrieve the saved coins inside. while the piggy bank represents a simple but ingenious system for individual savings and informal storage, central banks can be thought of as the piggy banks of the entire monetary system. so as the representative of the dutch piggy bank, let me give you my view on the macroeconomic development of indonesia, and its role in the world. i am not the only speaker this morning to mention that indonesia and the netherlands are important trading partners : according to the international trade centre, in 2023 we exported 0. 8 billion euros worth of goods to indonesia, while we imported 5. 1 billion euros worth of goods in that same year. this makes the netherlands the 12th largest import partner of indonesia, and the largest within the eu. we enjoy a strong economic partnership, and the netherlands is keen to further develop economic opportunities for our countries'businesses. besides being key trade partners, indonesia and the netherlands work closely together in other domains as well. during the g20 bali summit two years ago, for example, we co - hosted a conference on payment systems with the bank indonesia institute, as part of a long - lasting cooperation between our central banks