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JAKARTA : Indonesian Vice-President and former central bank chief Boediono on Tuesday defended his role in a controversial bank bailout at the centre of the country's latest corruption scandal.
Boediono, a Western-educated economist who ran alongside President Susilo Bambang Yudhoyono in July polls, told a parliamentary inquiry the bailout of Bank Century in November last year was essential to prevent a banking crisis.
The decision to pump 6.7 trillion rupiah (704 million dollars) into the failing medium-sized bank has been condemned by government auditors and linked to allegations of graft involving political cronies and campaign finance.
But Boediono, who like many Indonesians uses only one name, insisted that with the world convulsed by financial turmoil Indonesia could not afford to let the bank fail.
"When Century collapsed the global crisis was at its height. We did not want to close any banks to avoid a domino effect," he told lawmakers.
"The bailout was not decided by me alone, but by all of us. The bailout decision during such an explosive time was the best decision for our nation."
Boediono and Finance Minister Sri Mulyani Indrawati -- two of the most respected economic brains in Yudhoyono's cabinet -- are under intense fire from lawmakers for authorising the bailout.
The country's top auditor, Hadi Poernomo, presented a report last month that found strong indications of "violations" in the bailout procedure and recommended a full investigation.
Poernomo found no evidence the collapse of Bank Century posed a systemic threat to the economy and said 2.8 trillion rupiah injected into the bank after 18 December, 2008 had "no legal basis".
The total funds disbursed to save the bank were 10 times the amount initially deemed necessary to prevent the lender's collapse.
Yudhoyono, who was re-elected to a second term in July partially on the back of promises to stamp out rampant corruption, has denied allegations that some of the rescue funds ended up in his campaign coffers.
- AFP/vm
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