Deposit Insurance, Regulatory Forbearance and Economic Growth: Implications for the Japanese Banking Crisis

Undang-undang Nomor 10 Tahun 1998 tentang Pemerintah Daerah mandates the establishment of a LPS (Deposit Insurance Agency) as the executor of the guarantee of public funds. one approach is needed separately to build a healthy banking system and strong is to give customers assurance that eksplisif for storage. LPS can function regulate safety and health of banks in general and conduct oversight by monitoring the balance, the practice of lending and investment strategies. In establishing a permanent guarantor institutions needed reform measures of the banking system as a prerequisite for effective system. Two basic reasons for the government to facilitate the establishment of LPS is the belief in the banking industry is very important for economic growth and the banking system is well controlled to minimize the occurrence of bank insolvency, and bankruptcy itself can be predicted and is an event that can be prevented. Also crucial is also a consideration equal protection of small customers from bankers who are not responsible is an approach that is fair and appropriate. In such conditions the bank can operate in a consistent and reliable to provide credit in the amount sufficient for the health of the economy.

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Will an Optimal Deposit Insurance Always Decrease the Probability of Systematic Banking Crisis?

SSRN Electronic Journal ◽

10.2139/ssrn.302406 ◽

2002 ◽

Cited By ~ 1

Author(s):

Mathias Drehmann

Keyword(s):

Deposit Insurance ◽

Banking Crisis

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DETERMINANT OF BANK RUNS IN INDONESIA: BAD LUCK OR FUNDAMENTAL?

Buletin Ekonomi Moneter dan Perbankan ◽

10.21098/bemp.v14i1.78 ◽

2011 ◽

Vol 14 (1) ◽

pp. 51-73

Author(s):

Iskandar Simorangkir

Keyword(s):

Economic Growth ◽

Banking Crisis ◽

Jel Classification ◽

Bank Runs ◽

Bank Performance ◽

Estimation Result ◽

Dynamic Panel ◽

Full Sample ◽

Dynamic Panel Model ◽

Panel Model

This paper examine the determinant of bank runs in Indonesia that includes economic fundamental,bank performance, and self-fulfilling prophecy factors for all banks either in full sample periods between years 1990 - 2005 or in banking crisis periods between years 1997 - 1998. The bank runs determinant uses dynamic panel model from Arrelano-Bond. Estimation result shows that self-fulfilling prophecy, bank monetary performance which is rentability and fixed credit ratio and macroeconomic condition which is economic growth, inflation and real exchange rate influence bank runs in Indonesia. Bank runs determinant in banking crisis between year 1997 - 1998 also shows a result that is not really different from bank runs determinant during full sample periods between years 1990 - 2005.JEL Classification: C29, C33, G21Key Words: Bank runs, Banking Crisis, Arrelano Bond Dynamic Panel

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SISTEM KOORDINASI ANTARA OTORITAS JASA KEUANGAN (OJK) DENGAN LEMBAGA PENJAMIN SIMPANAN (LPS) DALAM PENANGANAN BANK GAGAL

Jurnal Surya Kencana Satu : Dinamika Masalah Hukum dan Keadilan ◽

10.32493/jdmhkdmhk.v6i1.138 ◽

2017 ◽

Vol 6 (1) ◽

pp. 1

Author(s):

WIWIN WINTARSIH WINDIANTINA

Keyword(s):

Economic Growth ◽

Financial Services ◽

Deposit Insurance ◽

Banking Sector ◽

Banking Industry ◽

Financial Service ◽

Financial Service Authority ◽

Insurance Agency ◽

Financial Transactions ◽

The Impact

ABSTRACTThe banking industry is a dynamic sector along with economic growth, an increasing of complex financial transactions, and the impact from global trade, therefore the presence of an independent institutions is really needed. The Deposit Insurance Agency (LPS) is an institution that is independent, transparent and accountable in implementing its duties and authorities. As an independent agency, accountability is very important to be applied, so that stakeholders aware of what and how LPS implement the functions and duties as mandated by Law No. 24 of 2004 concerning the Deposit Insurance Agency (LPS). Procedurally, if the Financial Services Authority (OJK) indicate a bank that is experiencing liquidity problems, Financial Services Authority (OJK) immediately inform the Bank of Indonesia (BI) to take steps in accordance with BI's authority. In practise, Financial Service Authority (OJK) coordinate withBank of Indonesia (BI) to make regulatory supervision in banking sector. Coordination in handling between failed banks between the Deposit Insurance Agency (LPS) and Financial Services Authority (OJK) is shown by a confirmation from Financial Services Authority (OJK) to the Deposit Insurance Agency (LPS) about troubled banks that are in the restructuring efforts by Financial Services Authority (OJK), then the Deposit Insurance Agency (LPS) investigate the banks in accordance with its functions, duties and responsibilities. The Deposit Insurance Agency (LPS) as an institution that checks condition of banks surely will review and determine whether the troubled banks will be saved or not saved.

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The Finance-Growth Nexus: Evidence from Emerging Markets

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v7i6(j).614 ◽

2015 ◽

Vol 7 (6(J)) ◽

pp. 13-23

Author(s):

Ashenafi Beyene Fanta

Keyword(s):

Economic Growth ◽

Emerging Economies ◽

Banking Sector ◽

Generalized Method Of Moments ◽

Banking Crisis ◽

Bond Markets ◽

Development Indicators ◽

Omitted Variable Bias ◽

Variable Bias ◽

The Impact

The finance growth literature ignores the role of bond markets in financing private investments. Moreover, the impact of bank crisis on the finance growth link has been largely overlooked. This paper aims at casting light at the finance growth link in emerging economies by accounting for bond markets and controlling for banking sector crises. Data on economic growth and financial development indicators for 15 emerging economies (drawn from Africa, Asia, Latin America, and Europe) were analysed using a system generalized-method-of-moments (GMM) technique. It is observed that while banking sector development is related to economic growth (albeit negatively), no statistically significant relation is observed between stock markets and or bonds markets and economic growth. Moreover, a banking crisis is found to affect the finance growth link in such a manner that the link weakens when a banking crisis is introduced to the model. Our results are robust to omitted variable bias, simultaneity problem, heteroscedasticity and autocorrelation.

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