The paper is organized as follows. The next two sections provide some general
observations and suggest lessons derived from the experiences of other countries. One core of the
paper considers the corporate governance of companies and business groups, and considers the
Korean case for comparison. The other core is the ensuing discussion of the role in corporate
governance of monitoring by the capital markets and particularly by banks, with issues relating to
relationship banking and deposit insurance addressed. Given their needs for external finance, all
growing companies in Indonesia, large and small, listed and unlisted, private sector and stateowned
enterprises, borrow from banks to the extent possible, so the bank monitoring function is
of transcendental importance. Following this discussion, I then look at Indonesia’s banking mess
and the key issues for reform.