monetary system is that it enables countries to insure against bad times. in particular, a country that is a net lender to the rest of the world – by exporting and saving more than it imports and consumes – is able to draw on i wish to thank marcel fratscher, ettore dorrucci and arnaud mehl for their contributions. the opinions expressed reflect only mine. the terms “ order ” and “ system ” are here used interchangeably. it should be borne in mind, however, that mundell ( 1972 ) and mckinnon ( 1996 ) made a distinction between international monetary “ order ” and “ system ”. according to their definitions, the order is the set of rules and the system the modus operandi of the order. see robert mundell, “ the future of the international financial system ”, in acheson, j. chant and prachowny, bretton woods revisited, university of toronto press, 1972. see also ronald mckinnon, the rules of the game : international money and exchange rates, mit press, chapter ii, 1996. referred to as the life - cycle hypothesis of consumption for individuals ( f. modigliani and a. ando, “ the life cycle hypothesis of saving ”, american economic review, 1963 ), which was reformulated for the behaviour of countries by modigliani ( 1970 ), “ the life cycle hypothesis of saving and intercountry differences in the saving ratio ”, in : eltis, scott and wolfe, eds., induction, growth and trade : essays in honour of sir roy harrod ( clarendon press, oxford ), 197 - 226. those savings invested abroad when it falls on hard times. such a risk - sharing mechanism 4 has indeed been an important reason for the economic stability we observed for much of the 1990s and 2000s in advanced economies. in fact, this benefit was for a long time during the last decade regarded as a major economic achievement. yet the increased financial integration of countries, and precisely this insurance mechanism, may also have played a role in the spreading of the current financial crisis to virtually every open economy in the world. a key point is that there is a limit to the extent to which the rest of the world can finance a country ’ s external imbalance. in a well - functioning monetary order, both policy - makers and markets should be able to assess the limits of the external funds available for a country to finance

second point is that in the future, the public will become more discerning and cautious in the selection of banks capable of serving their transaction needs. they will only be willing to deal with banks that provide a sense of security while also offering returns on the funds entrusted to their keeping. they will also select only those banks that understand their needs and are able to provide a wide range of conveniences in their services. these are the criteria that indeed will build and strengthen public confidence. ladies and gentlemen, today, indonesia remains attractive to portfolio investors because of the combination of high yield offered, an improving macro - economic position, a diversified economy and stable rupiah exchange rate expectations. the credit profile is gradually improving. the fiscal deficit appears relatively resilient to varying oil prices, although this issue remains a major question marked by international financial investors. furthermore, assets sales and privatizations are proceeding forward and government debt ratios continue to trend down due to the strengthening of the rupiah and the relatively modest budget deficits. despite positive recent signs of macroeconomic and political climate in indonesia, credit agencies point out that the country still faces some credit challenges, namely, high government debt and overall foreign debt levels, security issues and low levels of investment that limit long - term growth. looking ahead, i am confident that evidence of continued and timely implementation of reforms by the new government and strong commitment to maintain fiscal consolidation will favourably influence the credit ratings on indonesia. much work remains to be done, but we must do so systematically with clear design. the years ahead will not be without challenges, in fact we will face many more challenges than today. in closing, it is my hope that this forum will be able to serve as an arena of information exchange. it takes people from different skills and abilities ; authorities, investors, bankers, academics, and others to build a sound business environment and i hope our participation here will serve as a notable step in that effort. thank you.