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Jakarta Post

Insight: Financial recovery may take time, despite bailouts

  • Manggi Habir

    The Jakarta Post

Jakarta   /   Wed, October 22 2008   /  10:45 am

Two weeks ago, the U.S. financial crisis went global in a big way. For the average man living on Jl. Sudirman (in Central Jakarta), the drying up of money markets was only a peripheral phenomenon as news came in of far away global banks going bankrupt, being bought out by governments or allowed to reinvent themselves through mergers and management shake-ups. But plain to see were the tumbling of global share prices, including on the Jakarta IDX, and the concurrent weakening of currencies as foreign investors brought their funds home. Last week, share prices in free fall were arrested, only for them to land in choppy waters. The sweeping announcements of several government bailout packages, commitments to recapitalize banks, inject liquidity into interbank markets, cut interest rates and guarantee bank liabilities across the globe, were just enough to ease the panic...