Saturday, August 22, 2009

Are we going back to financial repression?

As if the strange deposit rate-cap policy isn't enough, Tony Prasetiantono calls for cut on profit margin (Kompas, 22/8). According to him, the agreement (to force deposit rate down to 8 percent and gradually closer to BI rate) will not be enough, because it only "affects the cost of fund". Sounds as if cost is not part of profit calculation, eh?

1 comment:

kigendengwaras said...

I have read those article sir, but i'm confused about "reducing margin profit"..
Maybe i didn't have quiet enough understanding on banking management (truly after read those article, i just know that credit rate not easily come from supply and demand on credit market), but reading words "margin profit" bring my thought on competitive sense (on market mechanism). It is really government can force banks to reduce their margin profit? Since from my opinion margin prift was an outcome of "banking competitiveness". So, if government wish to reducing banks margin profit, they simply must make banking more competitive.

Thank you for your explanation, I just an undergraduate student so apologize for maybe my silly question. thx sir..

nb: jika tidak keberatan mungkin bapak bisa mengunjungi regards..joseph