Little of the money is likely to ever be recovered. Analysts blame political troubles and the yearend rush for dollars to pay foreign loans. Bank Indonesia has been raising interest rates to prop up the currency, with success. Stability in central banks is something investors like to see. Bank Indonesia staffers insist business is normal despite the crisis.
Many officials are in fact reluctant to make major decisions.
Aditya Wardhana, a bank analyst at Trimegah Securities, explains that state pension funds and insurance companies complied with limits on deposits in any one bank by dividing the money among several. The government can't do much to clean up the central bank because of a law passed last year that grants the institution independence. Parliament now plans to trim that independence, and bank employees are protesting the move. Many of the 6,000 staff see Sabirin as a hero seeking to preserve its freedom from political meddling. Appointed in the final days of Suharto's rule in 1998, U.S.-educated Sabirin has always denied involvement in the Bank Bali anomaly.