 Indonesia: Blanket Guarantee, 1998Journal of Financial Crises, 2022, vol. 4, issue 4, 201-213 Abstract: The Indonesian government closed 16 banks on November 1, 1997. At the time, the government said it would guarantee depositors up to 20 million Indonesian rupiah (IDR; USD 6,000) per account. The lack of immediate full protection for large depositors caused deposit runs throughout the banking sector and undermined foreign confidence in the Indonesian financial system. In response, the Indonesian president on January 26, 1998, announced a blanket guarantee and created the Indonesian Bank Restructuring Agency (IBRA) to administer the guarantee and other bank rehabilitation efforts. The blanket guarantee covered all depositors and nonsubordinated creditors in locally incorporated commercial banks. An official estimate of the total amount of covered liabilities is unavailable; for context, Indonesian banks had USD 209 billion in liabilities in June 1997, of which USD 110 billion were in rupiah deposits and USD 34 billion were in foreign currency deposits. The blanket guarantee lasted until September 22, 2005, when the government replaced it with a limited deposit insurance scheme administered by the Indonesian Deposit Insurance Corporation. Keywords: Asian Financial Crisis (AFC); blanket guarantee; IBRA; Indonesia (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ysm:ypfsfc:v:4:y:2022:i:4:p:201-213 Access Statistics for this article More articles in Journal of Financial Crises from Yale Program on Financial Stability (YPFS) Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.