ECONOMIST: MARKET STILL TRUSTS BOEDIONO, SRI MULYANI

Jakarta, March 5 (ANTARA) - Standard Chartered economist Fauzi Ichsan said here on Friday the market was continuing to have confidence in Finance Minister Sri Mulyani and Vice President Boediono.

"The president's statement strengthened the market's confidence in the vice president and the finance minister," he said when contacted on the issue.

He said the market situation remained conducive, adding the result of the plenary meeting of the House of Representatives (DPR) on Wednesday stating that the government's decision to bail out the Century Bank in 2008 violated the regulations did not make the market to fluctuate.

He said the market saw it as a normal thing to bail out a bank in time of a global crisis.

To underline the view Fauzi referred to the situation in the US at the time when the US government had to inject up to US$700 billion in order to save its banking system. The cost in Indonesia was recorded at only US$700 million, he said.

"In Indonesia the bailout money is not lost as the bank it saves still exists," he said.

He said in the case of the Bank Century bailout no legal evidence was found which could be used to bring the two figures to justice.

Fauzi said the House inquiry committee was set up due to allegations that some of the bailout funds had gone to a political party but no evidence had been found to prove that.

"The bailout is not illegal and therefore from the legal point of view Boediono and Sri Mulyani are safe," he said.

Fauzi said what he worried about was the worsening relationship between the executive and the legislative branches and the political crisis that might follow. However, he said, it was predicted if that would really happen it would not turn to be like in Thailand or the Philippines that had caused foreign investors' confidence to drop. He said the case was still considered local.

"What is feared is if the relationship between the two bodies worsen implementation of the government's policies would be hindered. However, it will not change international investors' confidence in Indonesia," he said.

Fauzi said if the case would be brought to the Corruption Eradication Commission (KPK), and the KPK would investigate the flow of the bank's funds, he hoped the investigation could be done immediately as so far no indications had been found showing that the funds had gone to any political parties.

"In my view if there are indeed funds flowing to political parties they are funds from customers who give contributions to political parties. That is their money. And if that really happened it was a violation of the general elections law but not of a banking law," he said.