Psst, have you heard...?

The massive deposit withdrawals at Bank Central Asia (BCA), Indonesia's largest private bank, during the weekend exposes once again the precarious condition -- if not the vulnerability -- of our economy, and more specifically, of the banking system.

The rush at BCA was sparked by unsubstantiated rumors that business tycoon Liem Sioe Liong, the bank's founder and majority owner, had died, and that the bank was in deep trouble after the closure of its office in Singapore. Not only was Liem alive, as it became clear when he appeared in TV newsclips that same Friday night, but on that same day, BCA announced its purchase of a large stake at Danamon, another major private bank. In any case, BCA has only a representative office in Singapore, and its closure, even if it was true, would have had no bearing at all on its performance.

But the fact that the feeblest of rumors triggered a massive panic among BCA depositors calls for closer introspection by banks and the monetary authority on the low confidence the public has in the banking and economic systems. How else could such rumors spread and gain currency so quickly among the public, unless there was a crisis of confidence in the first place? These are perhaps more important questions to address than the questions of who started these rumors, and what motivated them?

As Indonesia moves more and more into a market-based system which is fully integrated with the global economy, its stock and currency markets are becoming more prone to rumors. In such a system, rumors often drive markets up and down.

But the market usually has a way of correcting itself quickly as soon as it becomes known that the rumors are unfounded -- although undoubtedly some people in the meantime make a big killing from the volatility. In the United States and other developed economies, unsubstantiated market rumors rarely have any impact on the real sector of the economy because they are quickly countered, and markets adjust themselves just as quickly.

The catchword in all these economies is transparency -- in the market, in the economy and banking systems, and in the corporate world -- which prevents wild rumors from ever gaining significant currency. Transparency is lacking in Indonesia.

The Indonesian markets have already been tested several times in the past two years by rumors about the deteriorating health of President Soeharto. Each time, the market survived and recovered as soon as the presidential palace announced the real condition of the head of state.

These incidents, however, should have served as warnings of things to come as Indonesia became more integrated with the global economy. Some rumors have been known to be destructive, as we ourselves have learned from the current monetary crises.

Market volatility is the downside of the economic system that we have come to adopt. But it is no use blaming rumors. No one can stop them. The only way to counter rumors or minimize their impact is by playing the game to the fullest, and that includes making the system as transparent as possible.

Public confidence in the monetary system can only be earned by becoming fully transparent, instead of being more secretive, no matter what the law says about banking secrecy. Transparency is even more imperative in this Internet age -- where all kinds of information, whether true or false, credible or not -- flow freely and compete for people's attention.

The panic among BCA depositors this weekend was not only fueled by the fresh rumors. Since the government announced the closure of 16 private commercial banks on Nov. 1, rumors have been buzzing that BCA had bailed out some of the banks originally earmarked for liquidation by the government. BCA never confirmed these rumors. Since it is not a publicly-listed bank, it is under no obligation to disclose such moves. But as the largest private commercial bank, it has a moral duty to be more transparent to the millions of people who have entrusted their money with the bank.

The closure of the 16 banks have already caused enough jitters among depositors of other banks. It only takes the feeblest of rumors to shake their confidence.

It is not important to know who started these rumors and for what purpose, even if these are still possible to determine. The chief lesson from this weekend's incident is that unless banks open up their management, the next rumor could be destructive for the banks, the depositors, and for the rest of the economy. In short, transparency is in the interest of everyone.