Fed also monitors RI banks

Fed also monitors RI banks

NEW YORK (Dow Jones): The Federal Reserve Bank of New York has been monitoring the activities of the branches of Indonesian banks in the U.S., a banking source said Tuesday.

"Certain steps have been taken to reduce the risk for U.S. banks dealing with Indonesian banks here," the source said.

A spokesman for the Federal Reserve declined to comment. Sources said it was normal for the Federal Reserve to carefully and closely monitor the activities of Indonesian banks in the U.S. given the political and economic uncertainty in Indonesia.

"The Fed wants to make sure that there is enough liquidity here in the U.S.," a banker said, adding "If there is a payment to be made, they (the Fed) want to make sure there is enough money in the other side."

As a bank regulator, the Federal Reserve establishes standards designed to ensure the safe and sound operation of financial institutions.