Finance Minster Sri Mulyani (right) makes the statement at a press conference accompanied by acting Bank Indonesia Governor Darmin Nasution (left) in a response to the issuance of an audit report by the State Audit Board (BPK) on the case. (ANTARA/Puspa Perwitasari)
"According to the law on LPS the Coordinating Committee has no authority to approve or not to approve the extension of capital by the LPS," she said here on Tuesday.
She made the statement at a press conference accompanied by acting Bank Indonesia Governor Darmin Nasution, BI deputy governors Budi Rochadi and Muliaman Hadad and LPS chief commissioner Rudjito in response to the issuance of an audit report by the State Audit Board (BPK) on the case.
In her capacity as former chairperson of the Financial System Stability Committee (KSSK), Mulyani said in case LPS called for a consultative meeting with the Coordination Committee it was because it had to explain developments in the handling of the case to the Committee.
"A consultative meeting is not a meeting on license application. At the meeting, the Committee explained about the health condition of the bank and it could understand what LPS had done to deal with Bank Century," she said.
Regarding the coordination meeting, she said it had been active before Bank Century was handed over to LPS.
The committee emerged to follow up Law Number 24 of 2004 which was later changed into Law Number 7 of 2009 on LPS.
The Law Number 4 of 2004 was effective since September 25, 2004. It stated a Forum of Financial System Stability had been set up with regard to giving inputs and information to the Coordination Committee.
"It was put in the joint decision of the finance minister, the governor of Bank Indonesia and the LPS Board of Commissioners dated December 30, 2005 later renewed through a joint decree dated June 29, 2007," she said.
Sri Mulyani said accountability on the policy and action was measured according to whether they met three conditions namely whether the policy and action was in line with the law, with valid authority and whether or not they met the principles of accountability and benefit.
"Based on the conditions we stated that KSSK in its decision on November 20-21 to state that Bank Century was a failed bank and its failure had the potential to cause a systemic effect had already met the requirements," she said. (*)
