Telluride Market News

Impact of the global financial crisis were increasingly felt in the financial system in the country. But fear not, please continue to invest. However, the rational action is required. Do not forget to also understand the characteristics of the product to be utilized.

Bank Indonesia gives special tips in addressing the global financial conditions. The main one is to consider the risks that are not only appear on the product itself, but also external risk given the financial system of a country which no longer stand alone but is integrated with financial systems of other countries globally.

Here are tips to consider potential investors:

Risk Investing

1. Inherent risk (inherent risk)
Every product offered by banks, including Islamic banking products, have advantages and limitations of each. These products promise results in addition to certain advantages, it also contains inherent risks, so it is necessary to understand the characteristics of the product before use.

Please note, not all products offered by banks pure bank products. The product is pure banking, for example, savings, current accounts, deposits, krefit and sharia financing. While mutual funds and bancassurance products are an investment and insurance products issued by other financial institutions and marketed through the bank as a sales agent (selling agent). As a sales agent, the bank is not responsible ata skinerja rensadana and bancassurance products are.

Risks inherent pda savings, current accounts, deposits, for example, the possibility of withdrawal or disbursement difficulties if there are problems at the bank where the deposit funds.

Risks inherent in other products such as mutual funds, for example reduction of Net Asset Value (NAV)-based mutual fund shares because of the decline in the price of the stock portfolios for mutual funds.

2. External Risk
Apart from the inherent risks, each product also has influenced the risk of external economic conditions domestically and abroad, as well as the psychological condition of society. External risks, among others, can be derived from:

- The movement of stock price index
- The movement of currency exchange rates
- The movement of interest rates
- The financial crisis in other countries
- The level of public confidence in the financial condition
- The level of public confidence in political stability
- Rumors are growing

Derivative transactions requiring expertise. This transaction can only be done client who understands the true risk will be experienced. Unfortunately, Bank Indonesia has no criteria for this question.

According to the Economist of Bank Rakyat Indonesia Djoko Retnadi, derivative transactions are usually done between two parties, or bilateral. It causes no supervision or oversight. For that for which derivative transactions must understand the risks and benefits to be in the can.

“If you want to go to learn it first, if you need to have financial experts from banking,” he said in Jakarta on Monday, March 23, 2009.

In such transactions is not true if the position of the bank is higher (superior) than the customer, because they both agree on the agreement / contract. So far, the bank would be superior because the bank will not allow to have an open contract positions or loss would be greater than the number of transactions. “The position of the bank is not superior, equal to the initial position,” he said.

Therefore in case of default could have taken a variety of ways, depending on the agreement. Banks can change the customer in the form of credit losses. This is better than no solution at all if the customer fails to make payment. Banks could also make an agreement under hand for the completion of derivative transactions.

“It’s commonly called uncommited credit facility, is to anticipate if the customer fails to pay. This is important because if not be recorded as non-performing loans,” he said.

In the settlement of derivative transactions or restructuring, said Djoko high integrity is required. Because in terms of derivatives transactions, usually if you have a profit, which enjoy the advantages not say anything, but if it suffers losses scream.