Bank merger a necessity

Bank merger a necessity

As far as we know, the merger of state-run banks is not a new
idea. The government's announcement last Wednesday should
therefore not give us reason for surprise. Monetary crisis or
not, improving order in the national banking sector, which
includes our state-owned banks, has for some time been considered
a necessity, a measure that had to be taken because our national
banking sector was becoming inefficient. It was also necessary
because of future challenges that have to be anticipated.

In the banking sector specifically, scale of operations as
well as a healthy state determine the degree to which banks can
be helpful in actively boosting the business sector. Small banks
will have an equally small capability of doing so, and only big
banks will be able to participate in large-scale projects. This
latter argument indicates where the challenges that confront our
national banks are found.

Sine the government's aims and objectives in this matter are
understood, our stance must be clear: we support the efforts and
hope that subsequent stages in the process of implementation will
be continued smoothly in accordance with the plans. This is
important because, amid the current monetary crisis, our every
move, act and measure will be closely watched by the market.

More important, every failure -- or even delay -- on our part
to bring about the necessary economic reforms will surely damage
our long-term interests. The point is that at the same time we
are doing all this, all other nations in the world will also be
making every effort to prepare themselves for the dawning of the
free-trade era.

-- Kompas, Jakarta