Chronology Century Bank Rescue

Chronology Century Bank Rescue, Former Governor of Bank Indonesia, who is now Vice President, Boediono, prepare a written statement bundle as thick as 13 pages. Description was officially handed to the Special Committee Leadership Questionnaire Century, Idrus Marham, before starting oral testimony by answering questions the members of the Special Committee, on Tuesday (22/12/2009) at the Parliament Building, Jakarta. In a written statement, he explained the chronology of the situation and what is faced by the Bank of Indonesia, particularly since the beginning he served on May 22, 2008. He calls it "progress towards the explosion of Century Bank's problems". The following chronology presented Boediono:

In the early months of 2008, setting a number of leaders and officials of Bank Indonesia in the case of corruption is seriously affecting the atmosphere and morale and ultimately the performance of Bank Indonesia as the central bank. In light of the language, at the time it happened demoralization among the employees of Bank Indonesia. At the turn of the Governor in May 2008, the most urgent work is how to overcome the problem.

I will not describe in detail the steps I took during those months, but it includes: (1) repair the internal rules of Bank Indonesia that was allegedly to be "corrupt" in accordance with the advice of the Commission, (2) replacement and repositioning of officials, especially in the field of bank supervision, and (3) intensive communication with employees to lift their spirits and morale.

While carrying out these steps, the daunting crisis engulfing the world, the peak is the closure of Lehman Brothers in mid September 2008. This caused chaos and panic in global financial markets. In many countries, the flow of funds and credit stops, transactions and economic activities disrupted daily.

In many developing countries, including Indonesia, the flow of funds out there big. Capital outflow from Indonesia's worse because almost all countries in the region impose blanket guarantee, while we are not. Dollar exchange rate soared and on November 24, 2008 reached Rp 12,700 per U.S. dollar. BI's foreign reserves declined rapidly since the BI must meet at least part of the market dollar demand continued to increase. In the month of August until December 2008, Bank Indonesia's foreign reserves depleted very large to hold to the exchange rate is not wild and out of control. At its peak, foreign exchange reserves decreased by 50.6 billion U.S. dollars as of October 2008.

As a result of the outflow of funds, liquidity in the domestic dry and banks have difficulty managing the flow of funds. In October 2008, state-owned banks ask for an injection of liquidity to Rp 15 trillion from the government to cover their liquidity shortage. But, who suffer most are medium banks and small. Deposits community or third party funds (DPK) in a small secondary banks continued to decline since September 2008, fled abroad or big banks. Some customers even attract deposits and keep in a safe deposit box for fear that the bank was closed. Liquidity problems banks are medium and small is getting worse because one of the sources of funding that is usually very reliable by them, namely interbank funds, stopped flowing. Interbank Money Market (PUAB) jammed. Along with it all, there the signs of decline in asset quality in the estuary bank capital reduction effort that we've built since the 1997-1998 crisis. Securities are held by many banks, including SUN, had fallen sharply in value, causing losses and reduce the bank's capital adequacy ratio.

The atmosphere grew tense as in the months that was widely circulated rumors, that certain banks, and the list growing every day, experiencing difficulties. Trust bank customers ultimately rocking and the atmosphere is not only gripping, but explosive. Maybe you remember, there was a market analyst from securities firms that hold only the Police Department for allegedly spreading rumors by e-mail that can trigger panic. With even small triggers can crisis exploded.