Komisi IX DPR Dan Laporan BPK Bahwa Lebih Dari 95% BLBI Tidak Dapat Dipertanggungjawabkan

KOMISI DPR DAN LAPORAN BPK BAHWA LEBIH DARI BLBI TIDAK DAPAT DIPERTANGGUNG JAWABKAN 

 

Tadi telah dikemukakan adanya laporan audit investigasi oleh BPK tentang BLBI.

Ketika laporan tersebut diserahkan kepada Komisi IDP R, saya berfungsi sebagai anggota Komisi IX DPR. Maka dibentuk Panja untuk membahas laporan tersebut. Saya masuk sebagai anggota Panja.
Saya tidak banyak dilibatkan dalam rapat-rapat Panja yang mungkin juga dihadiri oleh para pejabat dari Bank Indonesia dan Departemen Keuangan. Rapat-rapatnya tidak di gedung DPR, tetapi di hotel-hotel.

Kesimpulan Panja mengejutkan saya. Seperti tadi telah saya kemukakan, menurut BPK sejumlah Rp138.442.026 juta atau 95, 78% dikategorikan oleh BPK sebagai "berbagai penyimpangan terhadap ketentuan yang berlaku, kelemahan sistem dan kelalaian dalam penyaluran BLBI yang menimbulkan potensi kerugian negara."

Oleh Panja disepakati bahwa Bl hanya disuruh bertanggung jawab sebesar Rp24,5 triliun saja, karena kalau lebih dari jumlah ini, BI bangkrut. Mana ada bank sentral yang bangkrut? Memang harus diamankan, tetapi pimpinan BI harus bertanggung jawab sepenuhnya. Tidak bisa Panja dengan enaknya memutuskan tanggung jawab BI yang direduksi sampai hanya Rp24,5 triliun saja.

Saya protes keras karena merasa DPR melecehkan dan memain-mainkan aparatnya sendiri, yaitu BPK. Kalau tidak percaya dengan BPK ya BPK--nya dibubarkan atau Ketua beserta staf intinya dipecat, tetapi jangan dimain-mainkan begitu.

Akhirnya, keputusan Panja tersebut diambangkan sampai Presidennya berganti dari Gus Dur ke Ibu Megawati. Menko Ekonominya, Prof. Dorodjatun, minta advis dari mantan Gubernur FED (Bank sentralnya AS) Paul Volcker. Advisnya dipakai dan diberlakukan, yaitu segala se- suatunya diselesaikan dengan secarik kertas dengan susunan kata-kata yang intinya Departemen Keuangan menjamin segala sesuatunya akan beres. Namanya "Capital Maintenance Note" dari Paul Volcker yang keseluruhan advisnya sebagai berikut.

 

Volcker Commission Recommendation on BLBI Financing

Earlier this year the government and Bank Indonesia requested that Paul Volcker from a team to examine the 'sue of how the burden of paying for the support given to the Indonesian banking system in the form of BLBI should be shared. On 15 May, Mr. Volcker submitted his report to the government and Bank Indonesia. That report does not try to assess blame for the issuance of BLB or to allocate the burden based on some idea of moral responsibility. Instead, it focuses, correctly, on the need to provide Bank Indonesia with a healthy balance sheet that would then permit it to manage monetary policy without undue concern over the impact of monetary policy on its financial position.

Thus the Commission's analysis is based on three propositions. 1. Bank Indonesia is an instrument of the state even if it is independent for purpose of managing monetary policy. 2. A strong capital base is essential to allow Bank Indonesia to perform its functions. 3. Normally, Bank Indonesia should run at a profit and thus provide revenue to the state but in unusual circumstances it may run deficit and it may be necessary for the government to provide income or additional capital to address any problem that may arise.

There is litte reason to quarrel with these propositions. They make the point that the idea that one can allocate the burden of BLB between Bank Indonesia and the government is fundamentally flawed. Since the government is the ultimate beneficiary of the profits of Bank Indonesia, any attempt to force Bank Indonesia to bear a burden simply reduces future government income. Moreover, the government has a responsibility to ensure Bank Indonesia is solvent now and n the future. Thus the commission correct y focuses on actions to ensure the financial solvency of the central bank.

 

Summary of Findings

Based on these principles, the Commission recommends as follows:

1. The existing BLBI bonds at Bank Indonesia should be withdrawn and new "Capital Maintenance Notes" should be substituted in their place. 
2. These Notes would normally bear no interest. However, if Bank Indonesia's capital fell below 5% of monetary liabilities, they would pay interest at a market rate until Bank Indonesia's capita rose above 5% of monetary liabilities. 
3. The amount of notes would be limited to the RP114,5 trillion of original BLB support plus Rp14.5 trillion in subsequent BLBI support less the Rp24.5 trillion that Bank Indonesia has already provided to the government out of its profits to make a partial responsibility for BLBI and by the amount collected on the collateral provided by bankers, which was transferred to BPPN. 
4. The amount of the notes would be reduced each year when Bank Indonesia's capital was greater than 10% of its monetary liabilities by the profits of Bank Indonesia that would normally be transferred to government.

In setting the amount of the notes, the commission explicitly or implicitly recommends that the Rp14 trillion in unpaid interest on the existing BLBI be written off along with the inflation revaluation of original Rp144,5 trillion in BLBI. The commission notes that the "trigger" levels of 5% and 10% for paying interest or paying off the notes are based on the current law that requires that Bank Indonesia's capital be 10% of its monetary liabilities. The commission believes that this level is actually too high and that it could be lowered somewhat, possibly to 8% or less.

The Commission then goes on to address three other issues of potentially lesser importance. First, it recommends that the current practices of not paying interest on government deposits or taxing the profits of Bank Indonesia be maintained. This is because such payments simply reduce the net profit provided to the government. Second, they see no reason to move away from using SBIs and towards to government securities as open market instruments at this time. Thus is mostly due to the lack of any significant market in government securities and the fact that they do not see any way in which this would reduce the cost of monetary policy Third, they recommend that Bank Indonesia continue to act as lender of last resort but that in circumstances where there is significant risk of losses, it should consult with the government as it will ultimately bear the burden of the loss. They emphasize in this part that strong supervision is required to ensure that Bank Indonesia is not abused as the lender of the last resort. I will not comment on these conclusions.

 

Comments on the Commission's BLBI Proposal

Generally, it is my view that the report approaches this problem correctly. The ultimate issue here should not be moral responsibility but ensuring that Bank Indonesia is financial y strong. This requires that it be given assets to match its liabilities and thus that its capital be positive. But accepting this proposition does not answer the question of how large the bond issue must be support Bank Indonesia. To answer that, one must look at Bank Indonesia's balance sheet. (A copy of Bank Indonesia's balance sheet as of the end of 2001 is attached to this paper).

A detailed analysis of the balance sheet is beyond the scope of this memorandum. However, it is clear that following the Commission's recommendations on BLBI would not significantly damage the balance sheet. Writing off the accrued interest and the revaluation of the government's bonds, and BIS bonds, will not put too much strain on the balance sheet. It will require that 14 trillion of the Rp49.8 trillion in the allowance for bad loans be used, but I assume that the remaining Rp358 trillion should be sufficient for that reserve account for now, though this 's an issue to discuss with Bank Indonesia.
Following the Commission's recommendations for the BLBI support would result in issuing notes totaling Rp134.5 trillion. This could be lowered even further if the 2001 surplus s distributed and the proceeds are used to redeem an equal amount of notes. Unfortunately, this cannot be done under the existing aw At present, the sum of the government's capital at Bank Indonesia and the general reserve are well below 10% of monetary liabilities required for there to be a distribution to the government.(1)

The question then is whether the currents law's measure of capital adequacy is appropriate. As noted above, the Commission found this to be high by international standards. While it is difficult to determine the level of capital for central banks around the world, a study of central bank capital from a few years ago provided a few examples of the level of capital held by some central bank. The Reserve Bank of Canada holds about 0.5% of total assets in capital, compared to Bank Indonesia's current 1,7%(2) or about 5% if statutory minimum is met. The US Federal Reserve held about 1.75% of its total assets as capital in the mid-1990s, a figure about one-third of what is required under our law. On the other hand, it would be seem that the central banks of Norway and Portugal hold significantly more capital compared to assets, often 10% or more.(3)

Where do these example leaves us? It would seem that our standard for determining capital adequacy for the central bank is somewhat high, though not unusually so. It would reasonable to restate the required level of capital plus reserves to be 2% or 3% of total liabilities. This would lower amount of capital plus reserves that would have to be held 'n order to permit the redemption of notes and would put us more in line with international practice. If this were done, then upper trigger could be set at the new level of required capital and reserves.(4)

The idea of having the Capital Maintenance Notes bear zero interest when the central bank is profitable seem appropriate but I worry about how the switch to paying market-based interest rates will work when needed in the future. If falling capital during a year could trigger and interest payment during that year, it could present significant fiscal problems for the government.(5) Thus, I assume that the determination of whether the notes would bear interest would be made based on the capital of Bank Indonesia at the end of the preceding year. Even that will be complicated as this may not be known with certainty in time for the budget process in September or October of that year but it is better than other possible approaches.

The question then is under what conditions should the government be required to pay interest? Here again it is difficult to find an international standard. The Commission chose one-half of the required level of capital. This is reasonable, but one might consider putting a cap on the amount of interest to be paid, in order to lower the variability of the payments.(6) For instance, the interest rate could be the lower of the one-month SBI rate (or T-bill rate if they exist) at the end of the preceding year or the interest rate that would generate interest income equal to the shortfall between the level of capital and general reserves and the 70% level of required capital and reserves or whatever new standard is developed. Thus today if 70% of this year's surplus is added to reserves, as required under the current aw, capital and reserves would be about Rp23.5 trillion. If those fell to Rp15 trillion, then Rp17 trillion would be required to bring capita back into line. If the total amount of bonds was Rp134.5 trillion, then that would mean an interest rate of slightly less than 13% rather than the SBI interest rate of nearly 18% at the end of last year. The effective interest rate would be even lower if there are other government notes held by Bank Indonesia.

This is probably a good point to turn an issue that was not addressed by the Commission because it was explicitly not in its terms of reference: Accounting for the Rp20 trillion in losses of Bank Exim and that Rp53.7 in bonds issued to fund the guarantee accounts at Bl. The governments total liability to Bank Indonesia at the end of last month was approximately Rp266.9 trillion, which consisted of Rp144.5 trillion n old BLBI, Rp20 trillion to cover the foreign exchange loss at Bank Exim, Rp53,7 trillion in bond issued to fund the guarantee accounts, and Rp48.7 trillion in inflation adjustments to the other amounts.(7) Thus does not include the unpaid accrued interest which is likely about Rp20 trillion and the Rp14.5 trillion in post-1999 BLBI. It would be useful to come to a decision on the treatment of these bonds as we as the BLBI bonds.

I would propose treating these other bonds similarly to the BLBI bonds. Thus the accrued interest and the inflation adjustment would be written off. That would leave Rp73.7 trillion n additional Capital Maintenance Notes to be issued. However, and this may be viewed as controversial, the government and Bank Indonesia could then agree that an equivalent amount of the positive balance in the government's account, including some of the government's foreign exchange holdings, would be used to redeem those notes at once. This would leave the total stock notes to be held by Bank Indonesia at about Rp122.2 trillion8 and the government would still have a cushion of deposits at Bank Indonesia.

An advantage of this approach is that it would eliminate the need to address the issue of what interest rate should be paid on government deposits as the deposits would now be very low and unlikely to grow significantly in the near future. A disadvantage of this approach is that Bank Indonesia will likely resist the idea that the governments positive balance should be used in this way.



Buku: Nasib Rakyat Indonesia Dalam Era Kemerdekaan

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(1) At present monetary liabilities, as defined by the law, are about Rp. 320 trillion and

 the government's capital plus the general reserve are only Rp.11.2 trillion, or more than Rp.20 trillion short of the amount necessary to be 10% of monetary liabilities. The law defines monetary liabilities as including cash in circulation, deposits by the banks, the government, and the central bank employees at Bank Indonesia, and outstanding SBI's. I have assumed in my calculations char this does not include the money owed to the IMF.

(2) Bank Indonesia's capital plus general reserve is Rpll.2 trillion compared to assets of

 Rp602.2 trillion.

(3) Eurozone statistics are difficult to interpret as they are the consolidated holdings of

 all of the old central banks and the ECB. It would seem that the consolidated entity has about 8% of total liabilities in capital plus reserves.

(4) While the market might respond badly to a reduction in the level of capital plus

 reserves to be held by Bank Indonesia, as long as the new absolute level was above the current balance of RPI I .2 trillion and the rules required that any surplus be used to repay the notes, I would think that the market would accept the change.

(5) For instance, if central bank's capital fell below the trigger level in November, it would often be impossible to finance interest payments in December without turning to financing from central bank, which would be self-defeating.

(6) The reason for the cap is that the level of bonds, particularly if there are bonds covering the 20 trillion of Bank Exim losses and Rp53.7 trillion from the guarantee program, may well be nearly double monetary liabilities. Thus high interest rates yield very large swings in income and surpluses or losses. 

(7) One issue should be raised at this point. In its 2001 balance sheet, Bank Indonesia list the government as owing it Rp315.9 trillion, not Rp266.9 trillion. It would be useful to determine what the Rp49 trillion difference represents and whether it should be addressed as well. This possibly includes the Rp.20 trillion or so in accrued interest and the Rp.28.4 owed to the central bank by BPPN.

(8) One further issue that should be investigated is whether any of the existing reserve for bad could be used to write off part of this debt. The issue here is whether yhat reserve is needed for other purposes, such as Bank Indover.