Meaning of Authority of Policy-Making Officials of Bail Out Century And Legal Responsibility In Constraining The Financial Crisis

Abstract

At the end of December 2008 Bank Century recorded a loss of Rp 7.8 trillion. The Bank is granted funding of Rp 1.55 trillion on February 3, 2009. The bail granting or bail out to Bank Century is a decision of the Financial System Stability Committee (KSSK) formed based on Government Regulation in Lieu of Law (Perppu) Number 4 2008 on the Financial System Stability Net which later established Bank Century as a failed bank with systemic impact. Determination of failed bank with systemic impact by policy-making officials is considered an abuse of authority if the policy creates a legal and political debate. However, this policy cannot be judged by the discipline of law or its implementer apparatus (overheidbeleid) which is an area of administrative law regardless whether there is a validity of substance of those policies or not. Policies issued in urgent and emergency conditions are generally not in accordance with or even against the written rules. Therefore, the policies issued in emergency conditions cannot be assessed or measured by regulatory products under normal circumstances. One of the consequences is an emergence of allegation of criminalization of the policy. In the view of law enforcer, such action cannot be qualified as criminalizing the policy if part of the policy-making mechanism is established on the basis of predetermined norms. The Supreme Court as the highest judicial institution has a different attitude in deciding a case related to government policy. Based on law and regulations, the Supreme Court pleaded guilty to policy-making officials who misused authority and provided clarity of responsible legal subjects if there is a state loss, namely to policy-making officials and parties that caused the bank to fail.

Keywords: bail out, failed bank, systemic, policy-making officials, abuse of authority.