Dialog sought for BLBI asset recovery: Economist<\/p>\n
M. Taufiqurrahman, The Jakarta Post, Jakarta<\/p>\n
The Ministry of Finance, Bank Indonesia and the Indonesian
\nBank Restructuring Agency (IBRA) must work together to resolve
\nthe protracted dispute on who should cover the huge financial
\nlosses resulting from bailing out banks in the past, an economist
\nsaid.<\/p>\n
Economist Faisal Basri said that since negotiations started a
\ncouple of years ago, no agreement had been reached as to how much
\nmoney could be recovered.<\/p>\n
"Each institution might have their own idea about the amount
\nof assets to be recovered, but at the end of the day, they must
\nhold a dialogue and set a common standing on how much they can
\nrecover," he told The Jakarta Post.<\/p>\n
The central bank, at the request of the finance ministry,
\nchanneled Rp 144.5 trillion (US$16.23 billion) in Bank Indonesia
\nliquidity support facility (BLBI loans) in the late 1990s to help
\nailing banks deal with massive runs, but a large part of the
\nloans was abused by borrowers.<\/p>\n
IBRA, set up in 1998, is mandated to recover the loans, and
\nhas received promissory notes and corporate guarantees issued by
\nthe borrowing banks and their owners.<\/p>\n
IBRA Chairman Syafruddin Temenggung reiterated on Thursday the
\nfact that the promissory notes and corporate guarantees were not
\nbacked up with sufficient collateral, and that the assets were
\nonly worth around Rp 12 trillion, as audited by the Supreme Audit
\nAgency (BPK).<\/p>\n
This means the recovery rate of the BLBI loans would only be
\naround 18.3 percent, compared to 70 percent as targeted by the
\ngovernment.<\/p>\n
Syafruddin said that the agency should not be faulted for the
\nlow recovery rate, because it was Bank Indonesia that had
\nchanneled the loans without securing sufficient collateral.<\/p>\n
The finance ministry and the central bank are currently
\nengaged in talks facilitated by the House of Representatives on
\nwho should share the burden of financial losses resulting from
\nthe BLBI loans.<\/p>\n
Syafruddin demanded that IBRA be included in the talks.<\/p>\n
Separately, University of Gadjah Mada economist Revrisond
\nBaswir said that IBRA's complaint came too late, as the agency
\nwould soon be disbanded.<\/p>\n
"This shows, however, that the government still has a long way
\nto go after the dissolution of IBRA, before it can achieve a
\nsettlement of the abused loans," he told the Post.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/dialog-sought-for-blbi-asset-recovery-economist-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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