Fixing our banking problems

With the surrender of the majority of assets, including shares, owned by ailing banks, the government has become their majority shareholder, which means it must meet those banks' obligations to third parties.

Meeting those rights and obligations, however, is not an easy task. Aside from the legal aspects that are involved, many other tricky problems must be settled by the government -- for example, there is the matter of how to maintain good relations with the banks' customers. Because of the ties that have been established over the years between the banks and their customers, it may not be so easy for the latter to immediately connect with the banking companies' new owners -- the government -- on the same terms.

Of no lesser importance is the problem of selling those banks' assets, which are mostly fixed. This will be difficult to do under the circumstances currently prevailing in Indonesia. The government must therefore not tire in its efforts to secure more liquid assets from these banks, so that it can at least in part cover its money requirements without having to resort to printing.

We are confident that in selling the ailing banks' assets the team that has been entrusted to fix the ailing banks' problems will be able to work under optimal conditions, untainted by corruption, collusion or nepotistic practices.

-- Bisnis Indonesia, Jakarta