Compared to global and regional standards, Indonesia’s financial sector is underdeveloped. The size of the finance sector is equivalent to only slightly more than 100% of gross domestic product (GDP), which is considerably less than the size of the financial sectors in large Asian economies such as India, where the equivalent figure is 300%, and the People’s Republic of China, where the figure is 500%.2 With a limited number of pension funds, insurance companies, and nonbanking institutions, Indonesia’s financial sector is characterized by the dominance of the banking industry, which controls about 80% of assets in the financial system (footnote 2). Despite a high number of commercial banks operating in this sector, 10 banks control about 64% of total assets in the system3, and four large state-owned commercial banks own about 36% of the assets in the banking industry.