Govt urged to reveal 40 banks under IBRA care

Govt urged to reveal 40 banks under IBRA care

JAKARTA (JP): The government has a moral responsibility to
disclose the names of 40 banks currently under the Indonesian
Bank Restructuring Agency (IBRA)'s supervision, economists said.

"The banking sector has made the whole country suffer, so it
is not fair to leave the people out in the cold without letting
them know what is happening and the various reasons for the
situation," Sri Edi Swasono of the University of Indonesia said
yesterday at a seminar.

Anwar Nasution, from the same university, said separately that
identifying the 40 banks would also help improve the government's
image, which has been eroding since a series of measures failed
to help the country cope with the economic crisis.

"It is better that (the names of) these banks are made public
so that they do not just assume anymore," Anwar said.

"Right now, people have no idea which banks are healthy and
which are not."

IBRA suspended the operation of seven private, insolvent banks
and took over the ownership and management of six private, ailing
banks and one state-owned bank on April 4.

There are another 40 ailing banks currently under IBRA
supervision, but the agency has not disclosed the names of the
banks for unknown reasons.

On Nov. 1 last year, Bank Indonesia also closed down 16
private banks, which prompted the public's confidence in local
banks to crumble.

Sri Edi said the government had a responsibility to disclose
the names of the banks out of respect for the people, even though
the action might prompt a massive run on banks such as those
after the bank closures.

"Would you lie to the people just to avoid such a run?"

One of the most important parts of economic reform is
transparency, he said.

The government has so far been helping the banking sector
excessively, and it has not been careful or prudent in its
measures to protect the people, he added. (das)