PRESIDENT : BANK CENTURY BAILOUT CORRECT AS IT SAVED ECONOMY

Jakarta, March 1 (ANTARA) - President Susilo Bambang Yudhoyono said the government's decision to bail out Bank Century in 2008 was correct in that it saved the national economy and banks from the impact of the global financial crisis.

Speaking at a meeting with members of the Indonesian banking community at the state palace here on Monday, the president said he was ready to take responsibility for the decision to inject Rp6.7 trillion into the failed bank to prevent it from total collapse.

"I say that what was done to save our economy and the banking sector was right. As a policy, a measure to save the economy and the banking sector, it was correct and I am responsible for it although in terms of technical operations it was done by state officials in charge of financial affairs based on the law. Although I did not specifically issue an instruction or directive to bail out the bank, I justified the actions taken to that effect," he said.

He said although the decision was taken while he was abroad it was actually not necessary for the state officials concerned to ask for his approval to do it as by law the finance minister and the central bank governor had the authority to do it and had to do it quickly.

President Yudhoyono said the decision to bail out the bank was preferred above another option, namely closing the bank at the cost of around Rp6 trillion to repay third party funds.

"The options were closing the Century Bank and paying Rp6 trillion or bailing it out with Rp6.7 trillion with the management being taken over, and the possibility of the funds being recovered," he said.

He said, therefore, he had actually agreed to the formation of the House Bank Century Inquiry Committee only with a view to verifying accusations that the bailout funds had been used by a certain political party and a certain presidential candidate, and "as long as the committee sticks to its aim and works clearly within its intended context."
"The probe must be done although based on our law it is not a legal process, much less a legal investigation. Anyway, whatever the result will be in the House of Representatives (DPR) later, further process must be carried out. I will respond according to the existing regulations. It is impossible for me not to respond. But the probe by the parliament is not a legal process like that done by the police and prosecutor's office," he said.

President Yudhoyono said he respected the process of the case done by the DPR so far. "I am waiting as the head of government to see what the DPR thinks of the case, its view and position in the next one or two days. I respect the process currently being done by the DPR as a state institution responsible to the people like the President," he said.

On the occasion he also called on the police and the attorney general's office to minimize the loss from the case by seeking a freeze on the funds believed to have been taken away from the bank.

He also agreed with the bankers' request for the immediate issuance of a law on the Financial System Safety Net (JPSK) to anticipate possible crises in the future.

"I agree that a JPSK law needs to be immediately issued as a legitimate reference to prevent possible new complications," he said.

The DPR is scheduled to hold a plenary session on Tuesday and Wednesday to determine if the decision to bail out Bank Century is lawful or not.

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