http://thejakartaglobe.com/home/state-finance-officials-must-be-protected/348690
December 21, 2009
Ardian Wibisono
Indonesia's State Finance Officials 'Must Be Protected'
Amid calls for the suspension of officials and threats of criminal prosecution
over the controversial bailout of PT Bank Century, two key banking officials on
Monday urged that state policy makers in the financial sector be given legal
protection in certain emergency situations.
Halim Alamsyah, the central bank's director of banking research and regulation,
said the House of Representatives must pass a pending bill on the financial
system safety net, which provides a legal basis for emergency decision-making
and the handling of economic crises. Otherwise, he said, no government
officials would stick their necks out in a future financial crisis.
The Ministry of Finance submitted the bill to the House earlier this year but
lawmakers have yet to act upon it.
A House special committee has launched a high-profile - and many say
politically motivated - inquiry into the Rp 6.7 trillion ($710 million) bailout
that began in November 2008, and lawmakers are aggressively targeting key Bank
Indonesia and Finance Ministry officials who approved the rescue. Chief among
them are Vice President Boediono, who was central bank governor at the time of
the bailout, and Finance Minister Sri Mulyani Indrawati.
"It would not be easy to make a decision, considering the consequences," Halim
told reporters. "The House should process and pass the law, or no one will dare
to make decisions. If I were asked to make a decision and I knew it would turn
out like this [with an investigation], I would not do it."
Boediono and Sri Mulyani have said they acted to rescue Bank Century because
its collapse could have posed a systemic threat to the financial system.
The Supreme Audit Agency (BPK), however, said in its audit report that the
decision to categorize Bank Century as a systemic threat was not based on
sufficient data or valid information.
Halim, however, said the audit did not include information from the central
bank showing that the Bank Century crisis was extremely serious, and that two
other banks besides Bank Century had negative capital adequacy ratios.
"The BPK did not have a sense of the financial sector's condition at the time
because they do not have a financial background," he said.
Halim's call for a law regarding the financial system safety net was backed by
Sigit Pramono, chairman of the Indonesian Banks Association (Perbanas) and
publisher of the Jakarta Globe.
Pramono said he believed the officials made the right call on the bailout. "If
the bank was not saved, it could have harmed the whole banking system, it would
have created a bank run and it would have been very dangerous since distrust
among lenders was very high," he said.
Pramono said it was important to draw a distinction between political and
economic problems. "From what I see, the probe is already disproportional; the
case has led to personal issues," he said.
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