BI to join Bank for Int'l Settlement

BI to join Bank for Int'l Settlement

JAKARTA (JP): Acting governor of Bank Indonesia Anwar Nasution
said on Friday that the central bank would join the Bank for
International Settlement (BIS) after winning the approval of the
House of Representatives.

Anwar said that Bank Indonesia would benefit from BIS'
financial facilities, information trade and technology exchanges.

"BIS is like the United Nations of the world's central banks,"
Anwar told reporters on the sideline of a hearing with the
House's Commission IX, which oversees financial affairs.

BIS is an international organization that fosters cooperation
of central banks and other international financial institutions.

The bank does not accept deposits nor does it provide
financial services to private individuals or corporate entities.

Anwar said that in order to join BIS, Bank Indonesia would
have to pay a one time membership fee of US$42 million, a quarter
of which must be paid up front.

"As permitted by the House, we will pay the fee that will
automatically put as a member of BIS," he said.

Asked whether BIS could help strengthened the rupiah, he said
that Indonesia needed first to rebuild its ailing banking sector.

"We can't just ask BIS to inject their money into us, who do
we think we are?" he said.

However, Anwar added, central banks of neighboring countries
were willing to help Indonesia stabilize the rupiah since it
concerned their national interest. He did not further elaborate
on the central banks' assistance.

Headquartered in Basel, Switzerland BIS was founded in January
1930 under the Hague Conference, and currently members over 90
central banks.

In its website, BIS described its role as a forum for
international monetary and financial cooperation between central
bankers.

It said that the aim was to achieve mutual understanding of
monetary and economic questions and to facilitate international
cooperation in particular the monitoring of and support to the
international financial system.

The bank accepts deposits from its members with a significant
portion of the worlds' foreign exchange reserve kept by BIS.

Since last year, 45 central banks had voting rights and
representation at annual General Meetings.

The bank's board of directors comprises the governors of the
central banks from Belgium, France, Germany, Italy and the United
Kingdom with the chairman being the board of governors of the US
Federal Reserve System. (bkm)