ID :
42446
Sat, 01/24/2009 - 00:07
Auther :
Shortlink :
https://www.oananews.org//node/42446
The shortlink copeid
MP: BI MUST PUNISH BANKS VIOLATING DERIVATIVE TRANSACTION REGULATIONS
Jakarta, Jan 23 (ANTARA) - A member of the House of Representatives said here on Friday that Bank Indonesia (BI) must have the courage to examine and punish banks for violating regulations on reasonable derivative transactions.
"BI must have the courage to examine and punish banks for committing an offense," Dradjad Wibowo of House Commission XI said.
He said many unusual derivative products had been sold by banks such as callable forward and accumulators.
He said these products were not normal hedges because of the huge gap between the gains and losses to be enjoyed or suffered by the sellers or buyers.
He said with a callable forward sellers were protected by an automatic call mechanism when they made a loss while buyers did not have it.
In the case of accumulator sellers limited their loss at certain exchange rate level but they did not limit buyers' loss. "They even require them to hand currencies twice as much. This is not a normal hedging product," he said.
He said many hedging products sold by banks were not normal. For that, he said, BI had to ban their trading and cancel the products.
"The banks that sell them also have to be examined to see if they have violated BI regulations. I believe violations have been made," he said.
He said the speculative derivative transactions had so far reached US$4 billion.
The transactions have been under spotlight recently because of their speculative nature. It is believed speculative derivative transactions have made quasi demand hike for dollar causing pressure on the rupiah exchange rate.
BI has already banned the transaction of structured product but did not ban transactions of derivatives for hedging.
BI Deputy Governor Siti Fadjriah said before that the value of structured product already reported was around US$3 billion. In connection with it BI was just seeking to settle contracts that had been made before the ban was issued.
In all derivative transactions reported so far were still within a secure limit. However BI will continue to monitor their development. "We will check further but the first result that we could tell was that their value was still within limit," BI Governor Boediono said on Friday.
BI Senior Deputy Governor Miranda Gultom meanwhile said actually the loss incurred by banks as a result of unreasonable derivative transactions was not so much. "Not many banks were involved in such transactions and their loss was not too big like what happened in in Mexico, Brazil and Korea," she said.
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"BI must have the courage to examine and punish banks for committing an offense," Dradjad Wibowo of House Commission XI said.
He said many unusual derivative products had been sold by banks such as callable forward and accumulators.
He said these products were not normal hedges because of the huge gap between the gains and losses to be enjoyed or suffered by the sellers or buyers.
He said with a callable forward sellers were protected by an automatic call mechanism when they made a loss while buyers did not have it.
In the case of accumulator sellers limited their loss at certain exchange rate level but they did not limit buyers' loss. "They even require them to hand currencies twice as much. This is not a normal hedging product," he said.
He said many hedging products sold by banks were not normal. For that, he said, BI had to ban their trading and cancel the products.
"The banks that sell them also have to be examined to see if they have violated BI regulations. I believe violations have been made," he said.
He said the speculative derivative transactions had so far reached US$4 billion.
The transactions have been under spotlight recently because of their speculative nature. It is believed speculative derivative transactions have made quasi demand hike for dollar causing pressure on the rupiah exchange rate.
BI has already banned the transaction of structured product but did not ban transactions of derivatives for hedging.
BI Deputy Governor Siti Fadjriah said before that the value of structured product already reported was around US$3 billion. In connection with it BI was just seeking to settle contracts that had been made before the ban was issued.
In all derivative transactions reported so far were still within a secure limit. However BI will continue to monitor their development. "We will check further but the first result that we could tell was that their value was still within limit," BI Governor Boediono said on Friday.
BI Senior Deputy Governor Miranda Gultom meanwhile said actually the loss incurred by banks as a result of unreasonable derivative transactions was not so much. "Not many banks were involved in such transactions and their loss was not too big like what happened in in Mexico, Brazil and Korea," she said.
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