THE EFFECTIVENESS OF MACROPRUDENTIAL POLICIES IN MITIGATING THE SYSTEMIC RISK IN INDONESIA

This study aims to investigate the effectiveness of macroprudential policies in mitigating the systemic risk in Indonesia. The study uses quantitative descriptive analysis with the Vector Error Correction Model (VECM) and emphasizes on the impact of two macroprudential instruments applied in Indonesia; Macroprudential Liquidity Buffer (MLB) and Countercyclical Capital Buffer (CCyB) to credit growth for conventional and financing growth for Sharia bank. This study employes monthly data over the periods M12010-M102019 that obtained from Bank Indonesia’s (BI) website (www.bi.go.di) and the data published monthly by Financial Service Authority (OJK); Indonesia Bank Statistic and Sharia Bank Statistic.The result indicates that MLB has a positive impact on credit growth and negative effect financing for Sharia Bank. Otherwise, CCyB shows the opposite results, where it has a negative effect on credit growth, while in the Sharia bank, CCyB has a positive effect. Therefore, it is sufficient to conclude that MLB has a capability to curb the systemic risk for Sharia bank, whereas CCyB is effective for conventional bank.

The Influence Of Number Of Credit, Growth Of The Number Of Customers, and Capital Adequacy On The Profitability Of LPD In Kintamani District

Profitability is the ability of a financial institution (company) to earn a profit during a certain period, this study aims to determine whether the amount of credit, growth in the number of customers, and capital adequacy affect the profitability of LPD in Kintamani District. Sampling using purposive sampling method. The population in this study consisted of 61 villages in Kintamani District. The number of samples that meet the criteria are 20 LPDs in Kintamani District. The data analysis method used is multiple linear regression. Based on the results of analysis and hypothesis testing, it was found that the amount of credit did not have a positive effect on the profitability of LPDs in Kintamani District, while the growth in the number of customers had a positive and significant effect, and capital adequacy also had a positive and significant effect on the profitability of LPDs in Kintamani District.

Bank Ownership vs Credit Growth: Empirical Evidence from Vietnamese Commercial Banks

This paper is aimed at analyzing the relationship between bank ownership and credit growth of Vietnamese commercial banks. With the data of 20 commercial banks in period 2009-2018 period, the REM method is applied. The key findings are: First, credit growth rate of state-owned commercial banks in Vietnam is higher than of private commercial banks, which is opposite to the expected signal. The main reasons are (i) decision making of state-owned commercial banks on lending are backed by the government, which is more straight-forward than private banks; (ii) State Bank of Vietnam considers credit policy as one of the important monetary policy tools, of which state-owned commercial banks are the key drivers; (iii) state-owned commercial banks have stable and cheap funding sources, which create the good base for expanding credit with cheap interest rates. Second, asset size does not have any impact on credit growth. Credit growth rates are determined by the bank’s overall performance and maximum growth rate set by State Bank of Vietnam, not on assets. Third, the other bank-specific factors are statistically significant with credit growth, of which liquidity and ROA have the strongest influences. Recommendations for better credit growth management of commercial banks include: (i) State Bank of Vietnam and the Government to ensure soundness of the banking system, including applying the Basel II requirements to all banks; and establish more support packages in order to boost the lending activities of privately-owned banks. (ii) Commercial banks to reduce its non-performing loans in order to stimulate the growth in lending. Keywords: bank liquidity, bank ownership, credit growth, non-performing loans, ROA.

THE CREDIT GROWTH AND ECONOMIC ACTIVITY IN BOSNIA AND HERZEGOVINA

We have analyzed the impact of credit growth on economic activity in period before, during, and after credit crunch in Bosnia and Herzegovina i.e. from Q12007 to Q42012. In this period, credit growth on average proved itself as a good signal of economic contraction and economic slowdown. This is the first time that interdependence between credits and GDP in Bosnia and Herzegovina was established trough the receiver operating characteristic methodology and trough receiver-operating characteristic. The main research finding shows that level of credit growth is a good signal of substantial decrease of economic activity in case when credit growth was previously very high. The regulators and banking supervision should not allow excessive growth, because during and after credit crunch contraction of economic activity can happen even when credit growth rate is relatively high. This research is one of the first steps in creating early warning system for Bosnian economy by using banking sector data and national accounts data.

ANALISIS PEMBERIAN KREDIT PADA PT.BANK PERKREDITAN RAKYAT SAMUDERA PAINAN

The purpose of this study was to determine the implementation of credit at PT. Bank Perkreditan Rakyat Samudera Painan. The research method used is a qualitative data analysis method. The result described how credit distribution, credit growth, and credit collectibillity. The result of this study found that the granting of credit at PT. Bank Perkreditan Rakyat Samudera Painan has several stages namely, credit application stage, credit analysis stage, credit decision stage, credit contract stage and credit disbursement stage.

The Impact of Seven Macroprudential Policy Instruments on Financial Stability in Six Euro Area Economies

The aim of this paper is to investigate whether macroprudential policy instruments can influence the credit growth rate and hence financial stability. We use a fixed effects panel regression model to test the following hypothesis for six euro area economies (Austria, Finland, Germany, Italy, Netherlands and Spain) during time span 2010 Q3 to 2018 Q4: “Macroprudential policy instruments (degree of maturity mismatch; interbank loans as a percentage of total loans; leverage ratio; non-deposit funding as a percentage of total funding; loan-to-value ratio; loan-to-deposit ratio; solvency ratio) enhance financial stability, as measured by credit growth”. Our empirical results suggest that the degree of maturity mismatch, non-deposit funding as a percentage of total funding, loan-to-value ratio and loan-to-deposit ratio exhibit the predicted impact on the credit growth rate and therefore on financial stability. On the other hand, interbank loans as a percentage of total loans, leverage ratio, and solvency ratio do not exhibit the expected impact on the response variable. Since only four regressors (out of seven) have the signs predicted by our hypothesis, we can only partly confirm it.