THE IMPACT OF GLOBAL ECONOMIC CONTRACTION TOWARDS LENDING BEHAVIOR OF BANKS IN INDONESIA

Rizky Yudaruddin

Abstract


The global financial crisis of 2008 that hit many countries had become an important concern, especially the
banking industry in Indonesia. This was because first, the experience of the economic crisis of 1997-1998.
Second, the nature of the crisis could spread to other countries. So this study aimed to examine empirically the
impact of the global economic contraction on the behavior of bank credit in Indonesia. Using panel data source
from the Word Bank and Bank Indonesia Year 2004-2012, the data were analyzed with Dynamic Panel Data
using E-views program 8. The results showed that the global economic contraction had a significant effect on
the behavior of credit in foreign and joint venture banks in Indonesia in 2004-2012.

Keywords


credit behavior, crisis, interest rate, global economic contraction

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