scholarly journals Investigation of external and internal shock in the stability of Indonesia’s financial system

2017 ◽  
Vol 7 (3) ◽  
pp. 6-16
Author(s):  
Maulina Vinus ◽  
Suhal Kusairi
Keyword(s):  
Economic Growth ◽  
Financial Stability ◽  
Financial System ◽  
Quantitative Measure ◽  
Stability Index ◽  
External Factors ◽  
System Stability ◽  
Climate Index ◽  
Internal Factors ◽  
The Stability

The objective of this research is to develop a financial system stability index and analyze the internal and external factors that we expect to affect the stability of the Indonesian financial system. We measured the single model of financial system stability index (FSSI) from year 2004M03 to2014M09 in Indonesia, and compiled a single quantitative measure based on aggregate internal factors and external factors to capture and predict the shocks of the financial system stability. Stability parameters were composed of composite indicators on different bases. In addition, we developed a comprehensive index component associated with the relevant market conditions, including banking soundness index, financial vulnerability index, and regional economic climate index. Results stated that US economic growth and economic growth of ASEAN countries positively affected financial stability. In addition, current account, exchange rate, inflation, interest rate were shown to negatively affect financial stability. The results of this study imply that internal factors have a strong influence on the financial stability. Therefore, the central bank should give a fast and correct response to the changes of external and internal financial environment, especially for internal factors through monetary policy.

scholarly journals Financial System Stability and Economic Growth in Nigeria

2020 ◽  
Author(s):  
Isaac Ikeafe NJANG ◽  
Eko Eko OMINI ◽  
Festus Victor BEKUN ◽  
Festus Fatai Adedoyin
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
Financial Stability ◽  
Financial System ◽  
Granger Causality Test ◽  
System Stability ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
Sustainable Economic Growth

Abstract This study primarily seeks to evaluate the influence of financial system stability on economic growth in Nigeria from 1986 to 2016. Employing the use of Principal Component Analysis (PCA), this study constructs a Financial System Stability Index (FSSI) as measurement for financial stability. The indicators used in building the index capture three sectors of the Nigerian Financial System (NFS). The three sectors cover the banking sector, the capital market, the external sector and include a fourth component representing financial depth. The resulting index serves as a single qualitative measure for evaluating the level of stability in a nation’s financial system and proves capable of warning of an eminent financial crisis. Employing the use of four macroeconomic indicators, the index is then regressed against the Nigerian economic growth rate with an aim of discovering the short-run and long-run dynamics existing between both variables. The granger causality test, Johansson Co-integration test and Vector Error Correction Model (VECM) are the estimation techniques employed in achieving the objectives of this research. The granger causality test revealed a uni-directional causality between financial stability and economic growth in Nigeria. The Johansson Co-integration test showed that long-run co-integration relationship exists between financial stability and economic growth. Finally, the VECM results find that financial stability displays a negative relationship with economic growth and bears no significant effect on economic growth in Nigeria. The findings disclose that financial stability in Nigeria may be high and has resulted in the underutilization of financial assets thus hampering sustainable economic growth in Nigeria. In conclusion, the outcome of the findings shows that while financial stability may be necessary for initiating economic growth, it is not sufficient for sustaining economic growth in Nigeria. This research work recommends that the FSSI be employed as an additional tool for measuring the condition/state of financial stability in Nigeria and in predicting the onset of a potential financial crisis. The study further recommends that financial authorities must give attention to other aspects of financial development to facilitate sustainable economic growth in Nigeria.

Impact of Crypto-Asset Trade on Financial Stability

2020 ◽  
pp. 210-232
Author(s):  
Nader Trabelsi
Keyword(s):  
Systemic Risk ◽  
Financial Stability ◽  
Financial System ◽  
System Stability ◽  
Copula Model ◽  
Copula Approach ◽  
The Stability ◽  
The Empirical Analysis ◽  
Global Financial System

The chapter attempts to test the hypothesis that cryptocurrencies are real independent financial instruments that pose no danger to global financial system stability. For the empirical analysis, the authors use data related to bitcoin and widely traded asset classes. They also utilize the copula approach as well as the CoVaR model. The results show a significant role of crypto-asset market in the stability of global markets. Precisely, they find a dependence between bitcoin and oil prices defined by a normal copula model. The empirical results regarding the systemic risk show that extreme changes in bitcoin prices may have an adverse effect on equity and gold markets. There are positive and significant effects of EUR, JPY, and WTI markets when bitcoin goes down. The authors have also shown that after 2016 the virtual market sudden changes are more likely to raise the whole regular financial system losses, except the energy market. These results are important for policymakers and investors.

The Financial System Stability: The Essence, Vulnerability, Ways to Provide

2021 ◽  
pp. 81-90
Author(s):  
Yurii Lupenko ◽  
◽  
Yurii Radionov ◽  
◽  
◽  
...  
Keyword(s):  
Budget Deficit ◽  
Financial System ◽  
Decisive Role ◽  
The State ◽  
System Stability ◽  
State Budget ◽  
Internal Factors ◽  
Endogenous Factors ◽  
The Government ◽  
The Stability

The state financial system must function smoothly and respond promptly to destabilizing exogenous and endogenous factors that can arise at any time. Therefore, ensuring the financial system's stability and improving its mechanisms is an important component of public policy. The purpose of the article is to reveal the essence of the financial system's stability, identify internal factors of the financial vulnerability of Ukraine that may affect the effectiveness of the country's financial system, and find ways to overcome them. The content of the concept of "stability of the financial system" is revealed. It is established that the use of different terminology indicates the complexity and, at the same time, the versatility of this term. According to international experience, the country's central bank has a decisive role in assessing the stability of the financial system; in Ukraine, this function is performed by the National Bank of Ukraine. It was found that inefficient use of budget funds is one of the key factors in the financial system's vulnerability. The state of execution of the State Budget of Ukraine in 2020 is analyzed. It has been established that over the last decade, the budget has been executed with a deficit, and the existence of a significant budget deficit leads to a movement in the “debt spiral”. The Government borrows a significant amount of money to implement the budget, and therefore it is becoming increasingly difficult to attract them on reasonable terms. Failure to receive the funds leads to late spending. Thus, the budget deficit, public debt, and inefficient use of budget funds are the internal factors that increase the financial system's vulnerability and undermine its stability.

scholarly journals Stabilność systemu finansowego Unii Europejskiej

Studia BAS ◽  
2021 ◽  
Vol 3 (67) ◽  
pp. 87-116
Author(s):  
Małgorzata Mikita
Keyword(s):  
Financial Stability ◽  
Stock Price ◽  
Banking System ◽  
Financial System ◽  
Price Volatility ◽  
System Stability ◽  
Volatility Index ◽  
Degree Of Stability ◽  
The Stability ◽  
The Eu

The aim of the article is to present activities undertaken at the EU level to ensure financial stability, and to assess the degree of stability of the EU financial system on the basis of selected indicators. The first part of the article introduces the concept of financial system stability and describes its importance in the modern economy and the methods of estimating the stability of the financial system. The second part of the article is devoted to the presentation of activities undertaken by the EU to increase the stability of the financial system, and the assessment of financial stability on the basis of two indicators: the Z-score indicator, used to assess the stability of the banking system, and the Stock Price Volatility index, showing the stability of the capital market.

scholarly journals Changes In The Financial System Stability Of Asean Founder Countries Due To Covid-19

2021 ◽  
Vol 2 (5) ◽  
pp. 1635-1643
Author(s):  
Rusiadi ◽  
Anwar Sanusi ◽  
Ade Novalina ◽  
Milenia M Tafonao ◽  
Audre Aprillia
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Financial System ◽  
Secondary Data ◽  
T Test ◽  
System Stability ◽  
Test Model ◽  
Paired Sample ◽  
The World ◽  
The Stability

The threat of the spread of coronavirus to economic growth and inflation in countries in the world will also seep into the global and domestic macrofinancial sector. This research was conducted to analyze how the level of change in the stability of the financial system of ASEAN Founders (ASEFO) with the emergence of the covid 19 pandemic. This study used secondary data (time series) in asefo countries. The model used is a different test model paired sample t-test. The results of the analysis showed that the Covid 19 pandemic had a significant effect on the stability of the financial system with the ASEFO State NPL indicator.

scholarly journals QUARTERLY OUTLOOK ON MONETARY, BANKING, AND PAYMENT SYSTEM IN INDONESIA: QUARTER IV-2015

2016 ◽  
Vol 18 (3) ◽  
pp. 231-250
Author(s):  
TM Arief Machmud ◽  
Syachman Perdymer ◽  
Muslimin Anwar ◽  
Nurkholisoh Ibnu Aman ◽  
Tri Kurnia Ayu K ◽  
...  
Keyword(s):  
Economic Growth ◽  
Current Account Deficit ◽  
Banking System ◽  
Financial System ◽  
Private Investment ◽  
Fourth Quarter ◽  
System Stability ◽  
Fiscal Stimulus ◽  
The Stability ◽  
A Current

Indonesia ‘s economy in the fourth quarter 2015 was marked by maintained macroeconomic and financial system stability, with a starting economic growth momentum. Macroeconomic stability reflected by lower inflationary pressures, a current account deficit in a healthy level, and manageable pressure on Rupiah. The stability of the financial system remains solid, underpinned by the resilience of the banking system and the relatively stong financial market performance. As the third quarter of 2015, economic growth in the fourth quarter 2015 increased mainly driven by government spending. Looking ahead, economic growth is expected to be higher, with the support of fiscal stimulus, particularly a faster implementation of infrastructure projects, and also with the increase of private investment

scholarly journals PENGARUH INKLUSI KEUANGAN TERHADAP STABILITAS SISTEM KEUANGAN DAN PERTUMBUHAN EKONOMI DI ASEAN

2020 ◽  
Vol 2 (1) ◽  
pp. 161
Author(s):  
Iramayasari Iramayasari ◽  
Melti Roza Adry
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Significant Influence ◽  
Financial Stability ◽  
Financial System ◽  
Financial Inclusion ◽  
System Stability ◽  
Significant Positive Effect ◽  
Bank Branches ◽  
Positive Effect

This study aims to examine the effect of financial inclusion from the amount of ATMs inclusions and the amount of bank branches inclusions on financial stability and economic growth with deposit rates in ASEAN. This study uses panel data from 2004 - 2017 consisting of 6 countries in ASEAN, that are Indonesia, Malaysia, Thailand, Singapore, Philippines and Vietnam. The data processing method uses the Simultaneous Panel. Data is obtained from World Bank publications and FRED Economic Data annually. The results of the study explained that (1) Financial inclusion has a significant influence on financial system stability in ASEAN (2) The amount of inclusion ATMs has a significant effect on financial system stability in ASEAN (3) The amount of bank branches inclusions does not have a significant effect on financial system stability in ASEAN (4) Deposit interest has a significant effect on the stability of the financial system in ASEAN (5) financial inclusion has a significant effect on economic growth in ASEAN (6) The amount of inclusion ATMs has a significant effect but has a negative relationship with economic growth in ASEAN (7) The amount of inclusion bank branches has a significant influence on economic growth in ASEAN (8) Financial system stability on economic growth has a significant positive effect simultaneously on ASEAN (9) Economic growth on financial system stability has a significant positive effect simultaneously on ASEAN.

scholarly journals Peran Inklusi Keuangan melalui Integrasi Fintech dalam Stabilitas Sistem Keuangan Indonesia

2018 ◽  
pp. 150
Author(s):  
Fitri Rusdianasari
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Banking Sector ◽  
Financial System ◽  
Financial Inclusion ◽  
System Stability ◽  
Performance Technology ◽  
Bank Branches ◽  
Long Run ◽  
The Stability

Financial inclusion is a banking instrument that plays an important role in financial system stability through access and financial services. To improve financial performance, technology integration is now an interesting issue. This study aims to determine the role of fintech (financial technology) and other financial inclusion instruments such as MSME credit in influencing the stability of the Indonesian financial system. Error Correction Model (ECM) estimation is used to determine the long and short term effects through cointegration values ??between independent variables in influencing the dependent variable. The results of the analysis show that the number of bank branches has a significant long-term influence on financial stability through NPL performance, so direct investment directed at the banking sector also has a significant influence on financial system stability in the long run. However, fintech instruments such as ATMs and e-money have no significant effect on financial system stability. This condition was motivated by the limited reach of fintech development in the financial sector, especially for the unbankable community

scholarly journals PENGARUH VARIABEL MAKROEKONOMI TERHADAP STABILITAS SISTEM KEUANGAN DI INDONESIA (MELALUI PENDEKATAN MONETER)

2019 ◽  
Vol 1 (2) ◽  
pp. 473
Author(s):  
Rozi Syaputra ◽  
Melti Roza Adry
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Financial Stability ◽  
Stock Price ◽  
Linear Regression Analysis ◽  
Financial System ◽  
Least Square ◽  
System Stability ◽  
Positive Effect

This study aims to find out how the Influence of inflation on financial stability system in Indonesia. The data used are secondary data in the form of time series from 2005:M1 to 2017:M12, with documentation data collection techniques and library studies obtained from relevant institutions and agencies. The variables used are Inflation, BI Rate, BI-7 Day Repo Rate, Exchange Rate and Financial Stability System. The research methods used are: (1) Multiple Linear Regression Analysis and Ordinary Least Square, (2) Classical Assumption Test. The results of the study show that (1) Inflation does not have a significant and negative effect on financial system stability. This means that inflation has no effect on financial system stability. (2) Exchange rates have a significant effect on Financial System Stability. This means that Exchange Rates have positive effect of Financial System Stability in Indonesia, every Rupiah Exchange Rate against US $ is depreciated, it will increase Financial System Stability in Indonesia. So it can be said that Financial System Stability is influenced by the appreciation or depreciation of the Rupiah Exchange Rate against US $ in Indonesia.. (3) Economic Growth has a positive effect on Financial System Stability. This means that every Economic Growth increases, it will increase the financial system stability in Indonesia, (4) The Composite Stock Price Index has a positive effect on financial system stability. Si it can be said that financial system stability is influeced by the strengthening or weakening of the JCI in Indonesia.

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