Indonesian Bank Restructuring Agency
Encyclopedia
The Indonesian Bank Restructuring Agency (IBRA) ( (BPPN)) is part of a series of strategic policies taken by the Indonesian government in response to the banking and economic crisis which befell the country following the onset of the Asian monetary crisis in mid 1997. Among other things, the drastic depreciation of the Rupiah reduced bank liquidity, and loss of public confidence to the Rupiah and the banking system in general.
As a measure to cope with the scarcity of liquidity in the nation's banking system, Bank Indonesia
, as a lender of the last resort, provided liquidity assistance loans to banks. In addition, the Government instituted a blanket guarantee program for all bank liabilities, in order to arrest further erosion of confidence towards the system.
IBRA had been established on January 26, 1998 (based on the Presidential Decree No 27 year 1998) and was planned to have lifespan of five years for undertaking its tasks. Even though IBRA’s liquidation took longer than planned, the government finally terminated IBRA on April 30, 2004. According to the law of establishment of IBRA (Presidential Decree No. 27 Year 1998), IBRAs’ objectives were to administer the government's blanket guarantee program, and to supervise, manage and restructure distress banks. These objectives were extended on February 27, 1999 to include to manage the government’s assets in performing banks under restructuring status and to optimize the recovery rate of asset disposals of distressed banks. IBRA had been undertook an integrated and comprehensive series of activities consisting of bank liability program, bank restructuring, bank loan restructuring, shareholders settlement, and the recovery of state funds. These are carried out by the major operating units within IBRA: Bank Restructuring, Asset Management Credit, Asset Management Investment, Risk Management, and Support and Administration.
IBRA is supervised by the Ministry of Finance, the Financial Sector Policy Committee (FSPC) and the Oversight Committee. Financial Sector Policy Committee (FSPC/Komite Kebijakan Sektor Keuangan) was formed on August 21, 1998, which members include the economic ministers of Indonesia, and the Independent Review Committee (IRC), which includes representatives from International Monetary Fund
s (IMF), the World Bank
and Asian Development Bank
(ADB).
As a measure to cope with the scarcity of liquidity in the nation's banking system, Bank Indonesia
Bank Indonesia
Bank Indonesia is the central bank of The Republic of Indonesia. Bank Indonesia is currently governed by Darmin Nasution, former interim governor. The last governor before the interim phase, Boediono, resigned due to his vice presidential candidacy in the Indonesian presidential election...
, as a lender of the last resort, provided liquidity assistance loans to banks. In addition, the Government instituted a blanket guarantee program for all bank liabilities, in order to arrest further erosion of confidence towards the system.
IBRA had been established on January 26, 1998 (based on the Presidential Decree No 27 year 1998) and was planned to have lifespan of five years for undertaking its tasks. Even though IBRA’s liquidation took longer than planned, the government finally terminated IBRA on April 30, 2004. According to the law of establishment of IBRA (Presidential Decree No. 27 Year 1998), IBRAs’ objectives were to administer the government's blanket guarantee program, and to supervise, manage and restructure distress banks. These objectives were extended on February 27, 1999 to include to manage the government’s assets in performing banks under restructuring status and to optimize the recovery rate of asset disposals of distressed banks. IBRA had been undertook an integrated and comprehensive series of activities consisting of bank liability program, bank restructuring, bank loan restructuring, shareholders settlement, and the recovery of state funds. These are carried out by the major operating units within IBRA: Bank Restructuring, Asset Management Credit, Asset Management Investment, Risk Management, and Support and Administration.
IBRA is supervised by the Ministry of Finance, the Financial Sector Policy Committee (FSPC) and the Oversight Committee. Financial Sector Policy Committee (FSPC/Komite Kebijakan Sektor Keuangan) was formed on August 21, 1998, which members include the economic ministers of Indonesia, and the Independent Review Committee (IRC), which includes representatives from International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
s (IMF), the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
and Asian Development Bank
Asian Development Bank
The Asian Development Bank is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia...
(ADB).