Indonesia's banking crisis: a new perspective on $50 billion of losses
AbstractThe Asian crisis devastated the Indonesian banking sector and led to astronomical losses, almost entirely paid for by the government, i.e. by the general public. The paper provides a new perspective on the crisis, stressing that bank losses are not the same as losses to the economy: most of the 'losses' of the banks are actually transfers to borrowers and depositors. It should be possible to recover part of the amounts concerned through taxation of the major beneficiaries. The paper contrasts the conventional approach, embedded in business accounting, used to manage the banking crisis, with an alternative approach that relies on national accounting concepts. It shows how the latter can provide a new perspective, elucidating the massive transfers of wealth that took place during the crisis. This suggests possible improvements in bank resolution strategies, through the identification and quantification of the main transfers of wealth, followed by their taxation.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Bulletin of Indonesian Economic Studies.
Volume (Year): 40 (2004)
Issue (Month): 1 ()
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Web page: http://taylorandfrancis.metapress.com/link.asp?target=journal&id=107889
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- Leslie Teo & Charles Enoch & Carl-Johan Lindgren & TomÃ¡s J. T. BaliÃ±o & Anne Marie Gulde & Marc Quintyn, 2000. "Financial Sector Crisis and Restructuring:Lessons from Asia," IMF Occasional Papers 188, International Monetary Fund.
- Ross H Mcledo, 2008. "The Soeharto Era: From Beginning to End," Departmental Working Papers 2008-03, The Australian National University, Arndt-Corden Department of Economics.
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