Indonesian bank bailout criticised by audit agency
![Indonesian President Susilo Bambang Yudhoyono says the bailout should be see in the context of the global credit crisis last year. [AFP]](http://www.abc.net.au/reslib/200910/r455568_2226399.jpg "Indonesian President Susilo Bambang Yudhoyono says the bailout should be see in the context of the global credit crisis last year. [AFP]")
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Indonesian President Susilo Bambang Yudhoyono says the bailout should be see in the context of the global credit crisis last year. [AFP]
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Indonesia's Supreme Audit Agency has criticised a government bailout of a small bank during the global financial crisis, saying it was based on inadequate data and led to state losses.
Finance Minister Sri Mulyani Indrawati and Vice President Boediono, who was Central Bank governor at the time, were involved in approving the $US708 million bailout of Bank Century.
President Susilo Bambang Yudhoyono has said the bailout should be seen in the context of the global credit crisis of the time.
He has also dismissed as groundless speculation that his election campaign had benefited from the bailout funds.
Both Mr Boediono and Ms Indrawati have denied any wrongdoing, saying that the bailout was necessary to maintain financial market stability and ensure investor confidence during the global credit crisis last year.
The audit showed the Central Bank had violated its own regulations by extending loans to troubled Bank Century.
The audit agency also said there was no strong legal basis for the extension of a large part of the bailout funds given that parliament had rejected a proposed law originally aimed at giving grounds for the assistance.
Bank Century was hit by investment in high risk securities, which tumbled in value during the crisis.
The company was renamed Bank Mutiara in October.
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