Accéder directement au contenu Accéder directement à la navigation
Article dans une revue

The Determinants of Capital Buffer in Indonesian Banking

Abstract : Using monthly data of 99 commercial banks during the period 2004-2007, we investigate whether capital buffer can be explained by bank-specific, business cycle, regulatory and institutional variables. In regards to the business cycle, we find evidence that bank capital buffer is procyclical. These finding becomes different, if we divide banks into two sub-groups according to bank size and market involvement. More importantly, larger banks and listed banks more involved in market activities, tend to increase their capital buffer during economic booms, but reduce it during economic downturns. These findings have regulatory implications for the Basel II implementation in Indonesia, notably in solving its procyclicality. For instance, small banks consolidations and supporting banks to more involve in market activities, as well as market discipline enforcement, become necessary. This paper also reveals that higher non-interest income enhances capital buffer.
Type de document :
Article dans une revue
Liste complète des métadonnées

https://hal-unilim.archives-ouvertes.fr/hal-00785102
Contributeur : Françoise Merigaud <>
Soumis le : mardi 5 février 2013 - 13:41:29
Dernière modification le : mardi 12 mai 2020 - 15:56:10

Identifiants

  • HAL Id : hal-00785102, version 1

Collections

Citation

Agustinus Prasetyantoko, Wahyoe Soedarmono. The Determinants of Capital Buffer in Indonesian Banking. Financial Stability Review Bank of Indonesia, 2010, pp.81-92. ⟨hal-00785102⟩

Partager

Métriques

Consultations de la notice

166