Finance minister said about Century Bank
Bank December 6th, 2009
Finance Minister Sri Mulyani said a number of issues related to government measures to save the Bank Century.
Sri Mulyani at a press conference at the Finance Ministry building in Jakarta to respond to the investigation of audit Audit Agency (BPK) associated bailout Century Bank.
In his explanation, Sri Mulyani said the government back to save the Bank Century because it was feared would affect systemic for national banks.
“condition at that moment in November 2008, the global financial crisis, the closure of Century Bank in accordance with common sense could cause a chain effect.”
According to Sri Mulyani, the closure of Century Bank can also lead to rush or lose the trust of customers of national banks”will occur rush or queue not only at Century Bank, but also other banks, there are 23 other banks and a number of BPR that had similar problems with Bank Century”.
The experience of Indonesia, which had hit the same crisis in 1997 was also a consideration of the government to save the Bank Century.
A number of indicators
Finance Minister Sri Mulyani also mentioned a number of indicators that the reference of the Committee of Financial Sector Stability (KKSK) which was chaired by Sri Mulyani in making decisions.
Sri Mulyani said it noticed in detail the developments related to the macroeconomic conditions of the world at that time.
Financial markets experiencing strong pressure due to the collapse of international financial institutions such as Lehman Brothers and AIG.
“The condition of the macro as the last months of 2008 was under pressure and there is disruption of banking and financial system that is estimated to have the real potential of creating a deterioration of the situation and could potentially create instability,” he said.
Some of the underlying background rescue Century Bank is:
The first is the strong pressure from the financial market collapse of financial institutions such as Lehman Brothers International, AIG, and others.
At that time according to Sri Mulyani, Indonesia Stock Exchange plummeted by 50%
“The world capital markets have seen pressure from stock index. IHSG in January 2008 reached 2830, but in November fell to 1155, the decline of more than 50%. And we made a suspension of capital markets several times” Mulyani said.
At that time the value of foreign exchange reserves within 3 months fell from U.S. $ 59.45 billion to U.S. $ 51.64 billion.
In addition, the exchange rate also depreciates in the Rp9.800 per U.S. dollar in January to Rp 12,100 per U.S. dollar.
Sri Mulyani also said the policy of Century Bank is right to step measured in accordance with the principles of legislation, the authority in determining the policies and decisions, and have a useful principle and responsible.
