BI needs capable deputy: Analysts<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
As the country's banking sector is gearing up for major
\nchanges, President Megawati Soekarnoputri should be cautious in
\nselecting figures to be nominated to fill the post of senior
\ndeputy governor at Bank Indonesia (BI), which is soon to be
\nvacant, experts said on Sunday.<\/p>\n
Whoever fills the post, he or she should be capable of leading
\nthe industry through the transition period.<\/p>\n
Not only should he or she possess basic qualifications as a
\ncentral banker, including strong managerial skills and a thorough
\nknowledge of monetary and banking policy, the person should also
\ngain the confidence of the banking sector, which is currently
\nentering a critical period, said economist Dradjad Wibowo and
\nlegislator Max Muin.<\/p>\n
Anwar Nasution will end his tenure as BI senior deputy
\ngovernor on May 17.<\/p>\n
Under the BI Law, the President must propose between three and
\nfive nominees to the House of Representatives at least three
\nmonths before the tenure expires, meaning the candidates should
\nbe proposed before Feb. 17.<\/p>\n
"With the banking sector now embarking on major programs,
\nwhoever fills the post should be market-friendly and have the
\nability to lead the banking sector through all that," Dradjad
\ntold The Jakarta Post over the weekend.<\/p>\n
The programs are the restructuring of the country's banking
\nsector based on the newly released Indonesian Banking Landscape
\nand the plans to establish a Deposit Insurance Agency (LPS) and
\nFinancial Services Authority (LOJK).<\/p>\n
The Landscape is a blueprint for the banking sector to be
\nimplemented in stages over the next 10 years, with the main aim
\nbeing to build a sound, strong and efficient banking system. It
\nis based on the assumption that a resilient banking system is a
\nkey element in promoting economic growth and supporting the
\nstability of the financial system.<\/p>\n
The program raises banks' minimum capital requirements in the
\nnext seven years from the current Rp 10 billion (about US$1.2
\nmillion) to Rp 100 billion.<\/p>\n
Currently, there are 138 banks operating in the country, 55 of
\nwhich have a capital below the new requirement, the central bank
\ndata showed.<\/p>\n
"This is a huge project, as it could lead to massive bank
\nmergers in years to come. That's why whoever is on BI's board of
\ngovernors, especially the governor and senior deputy governor,
\nshould enjoy support from the banking sector," Dradjad added.<\/p>\n
Sharing Dradjad's view, Max, a member of House Commission IX
\non financial and banking affairs which overseas the election
\nprocess, said: "Whoever is elected has to be able to work with
\nthe BI governor and other officials at the central bank to send
\nsignals to the market that they can form a solid partnership to
\nget through difficult times."<\/p>\n
The two, however, refused to mention names, saying it was up
\nto the President.<\/p>\n
But, some names have already been circulating, such as Miranda
\nS. Goeltom (former BI deputy governor), economist Sri Mulyani,
\nSyafruddin Temenggung (current IBRA chairman), and Anwar himself.
\nBy law, Anwar is still eligible to be nominated and elected for
\nanother five-year term.<\/p>\n
The law also says that the House must decide in three weeks
\nwhether to select the winning candidate, or reject all the
\nnominations proposed by the President, through a fit and proper
\ntest.<\/p>\n
If the House rejects the nominees, the President has to submit
\nnew names.<\/p>",
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