Indonesia's VP Boediono defends 2008 bank bailout
Published on May 9, 2014 8:41 PM
VICE-PRESIDENT Boediono on Friday defended the decision to bail out troubled Bank Century at the height of the 2008 financial crisis, saying it was an emergency situation.
Dr Boediono, who was governor of Bank Indonesia at the time, took the stand as a witness in the Jakarta Corruption Court during the ongoing trial of then-BI deputy governor Budi Mulya over the bailout.
"It was an emergency situation. The options were to let Bank Century stop operations the following day and see bank runs, or we allow for the required documents (for disbursement) to be completed later," he said, explaining why procedures were skipped before monies were paid out to the failed bank.
Detailed assessments on the bank's financial strength were not carried out, but liquidity problems had started to engulf the bank at the time the bailout decision was made.
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