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Indonesia: IBRA's Asset Management Unit/ Asset Management of Credits

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Abstract

In 1998, Indonesia's banking sector was undercapitalized, under regulated, and suffering from an excess of nonperforming loans (NPLs). In response, the Indonesian government devised the Indonesian Bank Restructuring Agency (IBRA) and its Asset Management Unit/Asset Management of Credits (AMU/AMC) as part of a three-pronged government emergency plan, along with a blanket guarantee of the debts of all domestic banks and a framework for corporate restructuring. The AMU/AMC acquired and managed nonperforming loans from a variety of Indonesian banks and attempted to dispose of them. The AMU/AMC had acquired nearly IDR 400 trillion (approximately $86 billion) in face value of loans by April 2003. Throughout its history, the organization encountered political interference, transfer issues, documentation problems, and problems with legal authority that impeded its effective operation. Although the AMU/AMC was wound down on its initially scheduled end date of February 27, 2004, its functions and many unresolved legal cases were simply shifted to a new asset management company under the Ministry of Finance.

Suggested Citation

  • Nunn, Sharon, 2021. "Indonesia: IBRA's Asset Management Unit/ Asset Management of Credits," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 3(2), pages 381-409, April.
    • Handle: RePEc:ysm:ypfsfc:322020
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    File URL: https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1190&context=journal-of-financial-crises
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    References listed on IDEAS

    as
    1. Mari PANGESTU, 2003. "The Indonesian Bank Crisis And Restructuring: Lessons And Implications For Other Developing Countries," G-24 Discussion Papers 23, United Nations Conference on Trade and Development.
    2. Mr. Charles Enoch, 2000. "Interventions in Banks During Banking Crises: The Experience of Indonesia," IMF Policy Discussion Papers 2000/002, International Monetary Fund.
    3. Joseph J. Stern, 2004. "The Impact of the Crisis - Decline and Recovery," CID Working Papers 103, Center for International Development at Harvard University.
    4. Stern, Joseph J., 2004. "The Impact of the Crisis--Decline and Recovery," Working Paper Series rwp04-005, Harvard University, John F. Kennedy School of Government.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Asian Financial Crisis; asset management; Indonesia; IBRA; nonperforming loans; loan restructuring;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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