Friday, February 12, 2010

Dangerous Bank Century

Just My First Paper About Bank Century. If you want data about Bank Century, you can e-mail me at


After The first BC case (Bibit-Chandra) ending and now the second BC case (Bank Century) is at the end of the beginning. There are dangerous parallels between the two BC cases. The Bank Century case is at the end of the beginning, an issue which lay dormant for a year until the political landscape changed. Bank Century fell because of fraud perpetrated by its owners and accomplices who bled its treasury to death. The government has dealt with this part of the crisis by prosecuting the criminals, recovering the stolen money and taking control of the bank. The choice was then whether to let Bank Century disappear or to salvage the remains.
At the height of the economic crisis in November 2008, the Indonesian treasury faced a dilemma. If they let Bank Century fold, the domino effect could threaten to lead other financial institutions into bankruptcy and trigger a market crisis of confidenc. Hank Paulson who was then US Treasury Secretary faced the same dilemma and chose to let Lehman Brothers fall. That was followed by a deluge of financial failures which left the US economy reeling, sending an urgent message to the rest of the world. Neighboring countries like Singapore, Malaysia, and Australia immediately imposed a blanket guarantee on their banks. Indonesian businessmen implored our government to do the same, but the cost would be prohibitive. Instead, Indonesia chose to rescue banks that are deemed to pose systemic risk on the banking system. Bank Century was brought to the Committee for Stabilization of the Financial Sector (KSSK) which decreed a takeover, entrusting it to the Deposit Insurance Agency (LPS.
After research this case, founded that indications of violations of the rules and abuse of authority in this case as refer to Audit Report Investigative Badan Pemeriksa Keuangan (BPK). So, in this paper, we will explain detailed about the Bank Century from start to process bail out with the audit approach.

Key : Bank Century, Independent Auditor’s Report

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