JAKARTA, Jan. 12 (Xinhua) -- Indonesia's Vice President Boediono said on Tuesday that bailout policy taken on Bank Century worth 6.7 trillion rupiah (670 million U.S. dollars) in November 2008 was due to widening global financial crisis impact.
Boediono said that as crisis widened to Indonesia, the country's banking sector was heavily impacted.
"At that time, we faced crisis and there would be systemic effect if we did not take the policy," said Boediono before a parliamentary special committee handling the issue.
He said that the crisis was started by the bankruptcy of the U.S. investment bank of Lehman Brothers on Sept. 15, 2008.
"The crisis posed negative impact to Indonesia. I mean there was an extra ordinary incident occurred in Indonesia, which was the capital outflow from our forex reserves worth 3 billion dollars back to the origin countries," said Boediono.
That was why, he said, the government took the special step.
Boediono also said that the government did not want the same incident following Asian crisis in 1997/1998 re-occurred, a time when Indonesia shut several banks down.
"We had to be wise in taking lesson from the incident. The best lesson is from our own experience," said Boediono.
According to the vice president, Bank Century was a bank that its impact beyond itself.
"The impact could not be measured if it was closed," said Boediono.
According to a member of parliament, during the meeting to determine the bank's fate, many participants did not agree to save the bank.
Boediono said that the participants were there to provide inputs, but the decision makers were him as the governor of Bank Indonesia, the central bank, and the Finance Minister Sri Mulyani Indrawati as the head of the Committee of Financial Sector Stability at that time.
Critics said that the policy posed threat to the country's finance.
Indonesia parliament urged to handle bank bailout case fairly
JAKARTA, Jan. 12 (Xinhua) -- Indonesian student groups and activists Tuesday urged the parliamentary special committee handling the banking bailout case of Bank Century worth 6.7 trillion rupiah (670 million U.S. dollars) fairly.
In a statement circulated in the parliamentary meeting room, they said that the special committee should discover the case fairly, openly and without intervention from any parties that target to blur the aim of the investigation. Full story
Indonesia's finance minister to face parliament on bank bailout case
JAKARTA, Jan. 11 (Xinhua) -- Indonesia's Finance Minister Sri Mulyani Indrawati said that she is ready to attend the parliamentary session on Wednesday to explain banking bailout policy taken on Bank Century worth 6.7 trillion rupiah (670 million U.S. dollars), the Antara news agency reported on Monday.
"Yes, I am ready," said the minister responding reporters' question on her readiness to come to parliamentary building. Full story
Special Report: Global Financial Crisis
