ID :
109863
Fri, 03/05/2010 - 08:32
Auther :
Shortlink :
https://oananews.org//node/109863
The shortlink copeid
PRESIDENT JUSTIFIES DECISION TO RESCUE CENTURY
Jakarta, March 4 (ANTARA) - President Susilo Bambang Yudhoyono Thursday justified the decision taken by the Financial System Stability Committee (KSSK) in 2008 to rescue ailing Bank Century amid the threat of the global financial crisis at the time.
"I can understand why the decision needed to be taken. Not only do I understand but I also justify the decision to rescue Bank Century," the president said.
He recalled the fact there were rumors in Jakarta in November 2008 that a banking crisis was likely to happen.
The 1998 monetary meltdown had shown that a crisis of public confidence in the banking industry could trigger a real crisis, he said.
The president said he had not directly instructed the KSSK to bail out Bank Century as he was then making an overseas trip. However, he could justify it as he believed there was a real threat of crisis.
Yudhoyono said he was sure whoever was responsible for the country's financial security at the time would have made the same decision.
"Everybody is obliged to put out a flame, however small, which could grow into a fire that would have paralyzed the banking industry," he said.
He further pointed out several indicators of the precarious economic situation at the time that prompted the government to take the decision. They were a slump in share prices, the rupiah's depreciation against the dollar, a 12 percent decline in the country's foreign exchange reserves, and the effect of media reports on the devastating effect of the global financial crisis.
The KSSK decided to bail out Bank Century in November 2008 amid the world financial crisis. However, the amount of the bailout skyrocketed to Rp 6.7 trillion or ten times higher than the original estimate.
The majority of House of Representatives (DPR) members in a vote at a House plenary session on Wednesday night came to the conclusion that violations of state regulations were committed in the Bank Century bailout.
Of the 537 members attending the House plenary session, 325 voted for "Option C" (a statement ridiculing the bailout) and the other 212 for "Option A" (a statement justifying the bailout).
The vote`s outcome means the majority of DPR members believe violations were committed and there were indications of corruption, violations of banking and state finance policies, money laundering and other general crimes in the process of the merger and acquisition leading to the setting up of Bank Century and its eventual bailout by the government in 2008.
All the ruling Democrat Party members voted for Option A stating that the bailout was correct, supported by members of the National Awakening Party faction (FPKB) and the National Mandate Party faction (FPAN). One FPKB member voted for Option C and two others were absent.
Six other party factions, namely of the Indonesia Democratic Party of Struggle (PDIP), the Golkar Party, the Prosperous Justice Party (PKS), the United Development Party (PPP), the Gerindra and Hanura parties all voted for Option C.***
"I can understand why the decision needed to be taken. Not only do I understand but I also justify the decision to rescue Bank Century," the president said.
He recalled the fact there were rumors in Jakarta in November 2008 that a banking crisis was likely to happen.
The 1998 monetary meltdown had shown that a crisis of public confidence in the banking industry could trigger a real crisis, he said.
The president said he had not directly instructed the KSSK to bail out Bank Century as he was then making an overseas trip. However, he could justify it as he believed there was a real threat of crisis.
Yudhoyono said he was sure whoever was responsible for the country's financial security at the time would have made the same decision.
"Everybody is obliged to put out a flame, however small, which could grow into a fire that would have paralyzed the banking industry," he said.
He further pointed out several indicators of the precarious economic situation at the time that prompted the government to take the decision. They were a slump in share prices, the rupiah's depreciation against the dollar, a 12 percent decline in the country's foreign exchange reserves, and the effect of media reports on the devastating effect of the global financial crisis.
The KSSK decided to bail out Bank Century in November 2008 amid the world financial crisis. However, the amount of the bailout skyrocketed to Rp 6.7 trillion or ten times higher than the original estimate.
The majority of House of Representatives (DPR) members in a vote at a House plenary session on Wednesday night came to the conclusion that violations of state regulations were committed in the Bank Century bailout.
Of the 537 members attending the House plenary session, 325 voted for "Option C" (a statement ridiculing the bailout) and the other 212 for "Option A" (a statement justifying the bailout).
The vote`s outcome means the majority of DPR members believe violations were committed and there were indications of corruption, violations of banking and state finance policies, money laundering and other general crimes in the process of the merger and acquisition leading to the setting up of Bank Century and its eventual bailout by the government in 2008.
All the ruling Democrat Party members voted for Option A stating that the bailout was correct, supported by members of the National Awakening Party faction (FPKB) and the National Mandate Party faction (FPAN). One FPKB member voted for Option C and two others were absent.
Six other party factions, namely of the Indonesia Democratic Party of Struggle (PDIP), the Golkar Party, the Prosperous Justice Party (PKS), the United Development Party (PPP), the Gerindra and Hanura parties all voted for Option C.***
