THE MACRO-PRUDENTIAL POLICY AND BANK NON-PERFORMING ASSETS IN INDONESIA

Gustriani, Gustriani and Suhel, Suhel and Vinny Dwi Mellny, Vinny and Rasyida, Pratiwi (2023) THE MACRO-PRUDENTIAL POLICY AND BANK NON-PERFORMING ASSETS IN INDONESIA. Journal Finance and Business, 11 (1). pp. 42-50. ISSN 2302-9315

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Abstract

This study examines the effect of the Macro-prudential Intermediation Ratio (MIR) as an instrument of Bank Indonesia's macro-prudential regulation on Non-Performing Assets (NPA) as one of the banking industry performance indicators in Indonesia. In addition, this study also examines several other independent variables such as bank assets as an indicator of bank size, Bank Indonesia interest rates (BI rate), and inflation as macroeconomic indicators and their effect on NPA. The NPA, MIR, and bank asset data used in this study consist of 109 commercial banks operating in Indonesia during the period from January 2015 to December 2020. This study uses an Ordinary Least Square (OLS) analysis approach by undertaking classical assumption tests and statistical tests. The results show that (1) MIR, bank assets, BI rate, and inflation simultaneously have a significant effect on NPA (2) Partially, bank assets have a negative and significant effect on NPA while other variables including macro-prudential policy have no significant effect on NPA (3) Variable MIR, bank assets, BI rate, and inflation can explain variations of NPA variable by 34% (4) Larger bank size encourages prudent financing and reduces NPA.

Item Type:	Article
Uncontrolled Keywords:	Macro-Prudential; Bank; Non-Performing Asset; Policy
Subjects:	H Social Sciences > HB Economic Theory > HB1-3840 Economic theory. Demography
Divisions:	01-Faculty of Economics > 60201-Development Economics (S1)
Depositing User:	Dr Suhel Suhel
Date Deposited:	26 Apr 2023 00:23
Last Modified:	26 Apr 2023 00:23
URI:	http://repository.unsri.ac.id/id/eprint/96695

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THE MACRO-PRUDENTIAL POLICY AND BANK NON-PERFORMING ASSETS IN INDONESIA. (deposited 26 Apr 2023 00:23) [Currently Displayed]
- THE MACRO-PRUDENTIAL POLICY AND BANK NON-PERFORMING ASSETS IN INDONESIA (SIMILARITY). (deposited 26 Apr 2023 00:23)

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