Theoretical Study of Government Policies on Financial Crises that Have Occurred in Indonesia

Abstract

The financial system has a very strategic role in reducing transaction costs and reducing the possibility of asymmetric information. Financial crises that occur in each country have a detrimental impact on the economy in general and the financial system in particular. The deterioration of the rupiah exchange rate will greatly impact the industry community.

The Government is expected to provide trust to investors and business actors in the real sector. This has a psychological effect because macroeconomic variables are actually in good condition. But in fact, the sluggishness of the economy was felt at all levels. The potential that must be optimized in Indonesia is the investment climate, human resources, infrastructure development and trade integration.

The type of research used in this study is library research, that is research carried out through collecting data that is literature or study study carried out to solve a problem which is basically based on critical and in-depth review of relevant library materials.

There is a strong relationship between the factors that influence, among others: credit interst rates and deposit rates, oil prices, net export-import, foreign exchange reserves and real exchange rates. Referring to thr results of this study there are important things that should really be carried out by the government as a reference so that the economy returns to normal.