The Global Economic Crisis and Its Impact on Bank Lending in Indonesia

Rizky Yudaruddin

Abstract


This study examined the impact of the crisis on bank lending in Indonesia. The crisis was also interacted with profitability and liquidity to see the impact of profitability and liquidity during the global economic crisis on bank lending in Indonesia. This study involves bank specific as control variable and macroeconomic variables. Using panel data, I constructed a panel of 1,372 bank-year observations for 98 banks in Indonesiain the period 2002-2015. The empirical results showed that the profitability proxyed from Return On Asset affected bank lending negatively, but this effect was relatively insignificant. The study also found a positive and significant impact between liquidity and bank lending in Indonesia. Meanwhile only GDP which had a significant impact on lending with a positive sign.


Keywords


Crisis; Lending; Liquidity; Profitability

References


Allen, F., Jackowicz, K., & Kowalewski, O. (2013). The effects of foreign and government ownership on bank lending behavior during a crisis in central and Eastern Europe. Wharton Financial Institutions Center Working Paper, (13-25).

Andrieș, A. M., & Ursu, S. G. (2016). Financial crisis and bank efficiency: An empirical study of European banks. Economic Research-Ekonomska Istraživanja, 29(1), 485–497.

Bank Indonesia. (2009a). Outlook ekonomi indonesia 2009-2014, krisis ekonomi global, dan dampaknya terhadap perekonomian Indonesia. Jakarta: Bank Indonesia.

Bank Indonesia. (2009b). Laporan pengawasan bank 2009. Jakarta: Bank Indonesia.

Bebczuk, R., Burdisso, T., Carrera, J., and Sangiácomo, M. (2010). A new look into credit procyclicality: International panel evidence. BCRA Working Paper Series.

Cernohorska, L. (2015). Impact of financial crisis on the stability banking sectors in the Czech Republic and Great Britain. Procedia Economics and Finance, 26(15), 234–241.

Choi, M. J. (2013). Dissecting foreign bank lending behavior during the 2008–2009 crisis. Policy Research Working Paper.

Cull, R., & Pería, M. S. M. (2013). Bank ownership and lending patterns during the 2008-2009 financial crisis: Evidence from latin America and Eastern Europe. Journal of Banking and Finance, 37(12), 4861–4878.

De Haas, R., & Van Lelyveld, I. (2014). Multinational banks and the global financial crisis: Weathering the perfect storm? Journal of Money, Credit, and Banking, 46(1), 333–364.

Fungáčová, Z., Herrala, R., & Weill, L. (2013). The influence of bank ownership on credit supply: Evidence from the recent financial crisis. Emerging Markets Review, 15, 136–147. https://doi.org/10.1016/j.ememar.2013.02.002

Haryati, S. (2009). Pertumbuhan kredit perbankan di Indonesia: Intermediasi dan pengaruh variabel makro ekonomi. Jurnal Keuangan dan Perbankan, 13(2), 299–310.

Juanda, B., & Junaidi. (2012). Ekonometrika deret waktu teori dan aplikasi. Cetakan Pertama. Bogor: IPB Press.

Notta, O., & Vlachvei, A. (2014). The impact of financial crisis on firm performance in case of Greek food manufacturing firms. Procedia Economics and Finance, 14(14), 454–460.

Pontines, V., & Siregar, R. (2012). How should we bank with foreigners? An empirical assessment of lending behaviour of international banks to six East Asian countries. CAMA Working Paper 4.

Raz, A. F., Indra, T. P. K., Artikasih, D. K., & Citra, S. (2012). Krisis keuangan global dan pertumbuhan ekonomi: Analisa dari perekonomian Asia Timur. Buletin Ekonomi Moneter dan Perbankan, 15(2), 37-58.

Silalahi, T., Wibowo, W. A., & Nurlian, L. (2012). Impact of global financial shock to international bank lending in Indonesia. Buletin Ekonomi Moneter dan Perbankan, 15(2), 77-114.

Stepanyan, V., & Guo, K. (2011). Determinants of bank credit in emerging market economies. IMF Working Papers, 11(51), 1-21.

Widarjono, A. (2013). Ekomometrika, Pengantar, dan Aplikasinya. Edisi Keempat. Yogyakarta: UPP STIM YKPN.

Yudaruddin, R. (2017a). The impact of economic conditions on bank profitability of regional development bank in Indonesia. International Journal of Applied Business and Economic Research, 15(19), 1–12.

Yudaruddin, R. (2017b). Economic conditions and lending behavior: Evidence from the regional development banks in Indonesia. International Journal of Economic Research, 14(13), 105–114.


Full Text: PDF

Refbacks

  • There are currently no refbacks.





For further information and submission, please visit the conference website:

http://isbs.dinus.ac.id/ http://conference.feb.uns.ac.id/

WhatsApp Image 2018-03-30 at 00.29.07

 

SMARTFAB & SMICBES


Journal of Finance and Banking

Department of Banking and Finance
Faculty of Economics and Business University of Merdeka Malang

Mailing Address:
2nd-floor Banking and  Finance Building, Terusan Raya Dieng Street No.57 Malang, 65146, East Java, Indonesia
Phone/WhatsApp: +628123321664; Fax. +62 341 580511
Email: jkpunmermlg@yahoo.com

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.