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.

the various market niches they wish to operate in and must be proactive in seeking the potential clients in those sectors. the human resources in the bank cannot stand by idly, satisfied with their acquired formal education. they must be trained to understand the realities in the market in which they operate. third, implementation of steps to strengthen the financial system infrastructure ; a sound, efficient banking system requires adequate infrastructure. in this regard, it is essential to have an adequate financial safety net ( fsn ). to move towards the establishment of an adequate fsn, bank indonesia and the government have jointly completed the formulation of the policy framework for the fsn that also encompasses the soon - to - be - established deposit insurance agency ( lps ). with the establishment of this agency, the responsibilities for management of the guarantee program and resolution of insolvent problem banks will be defined more clearly. in addition, bank indonesia has worked untiringly to promote the application of good corporate governance ( gcg ) at all levels of bank management. bank indonesia is currently upgrading the provisions relevant to gcg in the banking system and the new gcg regulations pertaining to the functions of the board of commissioners and board of directors should be ready in the near future. at some point in the future, bank indonesia will also consider an intensive study of possibilities for changes to the regulations governing ownership of bank shares. furthermore, to strengthen the effectiveness of the bank intermediary function, supporting infrastructure is needed that will enable the lending process to operate more quickly and reduce the potential for problem loans. to this end, bank indonesia has initiated the establishment of the credit bureau set to commence operation in 2005. we have waited long for the credit bureau, and a great many have repeatedly asked me when this plan will come to fruition. fourth, improvement of prudential aspects and bank intermediary function ; on january 2005, bank indonesia issued the “ prudential banking policy package ” with 3 ( three ) key objectives that i can mention here : first, promote the operation of the intermediary function and consolidation of the banking system in productive business sectors, as reflected in the bank indonesia regulations on the legal lending limit, the debtor information system, and asset securitization ; second, promote efforts to build bank capacity in credit risk management, application of prudential principles, and sound banking practices that will ensure sustained financial system stability. this objective is clearly reflected in the regulations on earning