ID :
25231
Sat, 10/18/2008 - 10:37
Auther :
Shortlink :
http://m.oananews.org//node/25231
The shortlink copeid
BI TO ISSUE REGULATION ON RESCUE OF TROUBLED BANKS SOON
Jakarta, Oct 17 (ANTARA0 - Bank Indonesia (BI or central bank) will soon issue a regulation specifying in detail ways to rescue troubled banks in Indonesia, the BI chief said.
"It is still being formulated but it will be issued soon," BI Governor Boediono said here on Friday.
He said the regulation would later be used as a reference for the implementation of Government Regulation in Lieu of Law (Perppu) Number 4 of 2008 on the financial system safety net announced recently.
He said the rescue regulation would stipulate tighter requirements for banks to receive injections from Bank Indonesia. This was to prevent a repeat of the BLBI (Bank Indonesia Liquidity Assistance) bailout scandal in 1998.
He said Bank Indonesia would tighten its supervision on the implementation of the policy. "Indeed, it is important to supervise the use of funds through a good monitoring system," he said.
Based on Perpu Number 4 of 2008 the government and Bank Indonesia could intervene to save a collapsing financial institution and prevent its problem from impacting on the financial system.
The intervention would be done through an emergency financing facility provided by Bank Indonesia or through capital participation by the government and the Deposit Insurance Agency (LPS).
The emergency financing facility would be provided by Bank Indonesia but fully guaranteed by the government.
Bank Indonesia would have the authority to replace executive board members of banks receiving the facility without having to hold a shareholders' meeting, and put the bank execitves concerned under special supervision.
A committee for financial system stability (KSSK) would be established with power to decide if a bank was facing a crisis that could have an impact on the fincial system. The finance minister and Bank Indonesia governor would be members of the committee.
The finance minister recently said the government and Bank Indonesia would give incentives and facilities to private sector entities that help save problematic financial institutions.
"It is still being formulated but it will be issued soon," BI Governor Boediono said here on Friday.
He said the regulation would later be used as a reference for the implementation of Government Regulation in Lieu of Law (Perppu) Number 4 of 2008 on the financial system safety net announced recently.
He said the rescue regulation would stipulate tighter requirements for banks to receive injections from Bank Indonesia. This was to prevent a repeat of the BLBI (Bank Indonesia Liquidity Assistance) bailout scandal in 1998.
He said Bank Indonesia would tighten its supervision on the implementation of the policy. "Indeed, it is important to supervise the use of funds through a good monitoring system," he said.
Based on Perpu Number 4 of 2008 the government and Bank Indonesia could intervene to save a collapsing financial institution and prevent its problem from impacting on the financial system.
The intervention would be done through an emergency financing facility provided by Bank Indonesia or through capital participation by the government and the Deposit Insurance Agency (LPS).
The emergency financing facility would be provided by Bank Indonesia but fully guaranteed by the government.
Bank Indonesia would have the authority to replace executive board members of banks receiving the facility without having to hold a shareholders' meeting, and put the bank execitves concerned under special supervision.
A committee for financial system stability (KSSK) would be established with power to decide if a bank was facing a crisis that could have an impact on the fincial system. The finance minister and Bank Indonesia governor would be members of the committee.
The finance minister recently said the government and Bank Indonesia would give incentives and facilities to private sector entities that help save problematic financial institutions.
