Bank restructuring and financial institution reform in Indonesia

The banking sector underwent drastic reform in post-crisis Indonesia. Bank restructuring, driven by IMF conditionalities, resulted in the exit of insolvent banks and ownership changes of major private banks. Through recapitalization and sales of government-held shares, foreign-owned banks emerged as leading actors in the place of business-group-affiliated banks. As part of the restructuring process, an exit rule was created. The central bank, which up to that time had been given only partial authority under the jurisdiction of the Minister of Finance, now gained a full range of authority over banks. The central bank's supervision system on banks, risk management systems at individual banks, and their efforts to build risk management capacities, began to function. This is totally different from the old financial institution under the Soeharto regime, where banks had no incentive to control risks, as the regime tacitly ensured their survival.

The foundation of the Mexican welfare state and social security reform in the 1990s

Before 1982 Mexico's welfare state regime was a limited conservative one that put priority on the social security of organized labor. But following the country's debt crisis in 1982, this regime changed to a hybrid liberal model. The Ernest Zedillo government (1995-2000) in particular pushed ahead with liberal reform of the social security system. This paper examines the characteristics and the policy making of the social security reforms in the 1990s. The results suggest that underlying these reforms was the restructuring of the economy and the need to cope with the cost of this restructuring. The paper also points out that one of the main factors making possible the rapid execution of the reforms were the weakened political clout of the officialist labor unions due to their steady breakdown during the 1990s and the increase in the monopolistic power of the state vis-a-vis the position of labor during the negotiations on social security reforms.