COVID-19, stability and regulation: evidence from Indonesian banks

IF 2.3 Q2 BUSINESS, FINANCE

Studies in Economics and Finance Pub Date : 2023-07-10 DOI:10.1108/sef-12-2022-0569

P. Pamungkas, Taufiq Arifin, Irwan Trinugroho, Evan Lau, B. Sergi

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Abstract

Purpose This study aims to investigate the effect of credit relaxation policy during the COVID-19 pandemic and its efficacy as a countercyclical policy on bank risk and stability. Design/methodology/approach Using a sample of 39 listed Indonesian banks, the authors investigate the effect of credit relaxation policy on banks’ risk and stability. Data were retrieved from Eikon DataStream from monthly financial statements from June 2019 to December 2020. The authors use panel data analysis with a fixed-effect estimator to estimate the model. Findings The authors find that the credit relaxation policy affects banks’ stability. The authors also find no significant relationship between the policy and bank risk measured by non-performing loans. The authors also find that the policy mainly affects small banks and both state-owned and private banks. Originality/value This research has some policy implications that issuing prompt regulations to respond to urgent situations is needed and is very important to face crisis conditions and reduce the negative impact of such crises.

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2019冠状病毒病，稳定与监管:来自印尼银行的证据

目的研究新冠肺炎疫情期间信贷宽松政策的效果及其逆周期政策对银行风险和稳定性的影响。设计/方法/方法以39家印尼上市银行为样本，研究信贷放松政策对银行风险和稳定性的影响。数据来自Eikon DataStream，来自2019年6月至2020年12月的月度财务报表。作者使用面板数据分析和固定效应估计器对模型进行估计。研究发现，信贷放松政策对银行的稳定性有影响。作者还发现，以不良贷款衡量的政策与银行风险之间没有显著的关系。作者还发现，该政策主要影响小银行以及国有和私营银行。独创性/价值本研究具有一定的政策启示，即需要及时出台法规以应对紧急情况，对于面对危机状况和减少危机的负面影响非常重要。

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来源期刊

Studies in Economics and Finance BUSINESS, FINANCE-

CiteScore

4.30

自引率

10.50%

发文量

期刊介绍： Topics addressed in the journal include: ■corporate finance, ■financial markets, ■money and banking, ■international finance and economics, ■investments, ■risk management, ■theory of the firm, ■competition policy, ■corporate governance.