Burhanuddin new BI deputy chief<\/p>\n
JAKARTA (JP): Bank Indonesia director of foreign affairs
\nBurhanuddin Abdullah has been appointed by House of
\nRepresentatives Commission IX for banking as a new deputy
\ngovernor of the central bank.<\/p>\n
Out of the 39 legislators that participated in the selection,
\nwhich ended close to midnight on Friday, 22 voted for
\nBurhanuddin, 16 for the only other contender, Bank Indonesia
\ndirector of banking supervision Maulana Ibrahim, and one
\nabstained.<\/p>\n
The voting result is expected to be approved by the House at a
\nplenary session on Monday.<\/p>\n
Burhanuddin will replace Subarjo Joyusumarto who quit from the
\ncentral bank early this month to head the Kuala Lumpur-based
\nSoutheast Asia Central Bank Governors Conference (SEACEN), a
\ntraining and research center for Southeast Asian central banks.
\nSubarjo's term was not supposed to end until 2001.<\/p>\n
Under the new Bank Indonesia law on the independency of the
\ncentral bank, members of the board of governors are selected by
\nthe House of Representatives.<\/p>\n
Burhanuddin, a U.S.-trained economist, will be responsible for
\nthe central bank's banking policy.<\/p>\n
Part of his job will be to decide on whether to recapitalize
\nor liquidate publicly listed Bank Bali.<\/p>\n
Burhanuddin declined to comment on Bank Bali, arguing that he
\nhad as yet to study the matter.<\/p>\n
He also said the Bank Bali problem was not his responsibility
\nalone but was also the responsibility of the other members of the
\nboard of governors.<\/p>\n
The Financial Sector Policy Committee (FSPC), which groups
\nseveral senior economics ministers, decided on Thursday to
\ntransfer Bank Bali from the Indonesian Bank Restructuring Agency
\n(IBRA) back into the hands of Bank Indonesia.<\/p>\n
Bank Indonesia must now decide whether to recapitalize or
\nliquidate Bank Bali.<\/p>\n
Some analysts, however, said that Bank Indonesia would be
\nreluctant to liquidate the bank because such a move would cost
\nthe government about Rp 6.8 trillion in cash, due to its blanket
\nguarantee on depositors' money.<\/p>\n
In comparison, recapitalizing the bank would cost the
\ngovernment some Rp 5.2 trillion in bonds, not cash.<\/p>\n
Gadjah Mada University economist Sri Adiningsih said another
\noption for Bank Indonesia was to merge Bank Bali with a stronger
\nbank.<\/p>\n
Burhanuddin said his immediate program was to improve Bank
\nIndonesia's information system, and to upgrade the banking
\nsupervision system before the supervisory role is transferred to
\na special independent agency in 2002.<\/p>\n
Burhanuddin was hopeful of becoming a deputy governor at the
\nbank earlier this year but he was defeated by Aulia Pohan. Many
\nBank Indonesia employees went to the legislative building to give
\nsupport to Burhanuddin.<\/p>\n
There have been rumors that Bank Indonesia Governor Sjahril
\nSabirin was against Burhanuddin becoming a deputy governor.<\/p>\n
Sjahril is currently being detained by the Attorney General's
\nOffice over alleged involvement in the high profile Bank Bali
\nscandal, which emerged in the middle of last year. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/burhanuddin-new-bi-deputy-chief-1447893297",
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