Capital buffer for stronger bank stability: Empirical evidence from Indonesia’s commercial banks

Dwi Nastiti Danarsari; Rofikoh Rokhim

Capital buffer for stronger bank stability: Empirical evidence from Indonesia’s commercial banks

Dwi Nastiti Danarsari, Viverita, Rofikoh Rokhim

Department of Management

Research output: Contribution to journal › Article › peer-review

7 Citations (Scopus)

Abstract

This study investigates the relationships between capital buffer and bank stability among commercial banks in Indonesia during the period 2001 to 2015. The scope of this study is before and after the 2007-2008 financial crisis and the implementation of Basel II and Basel III in Indonesia’s banking sector. By using dynamic panel regression, the estimation indicates that improvement of the capital buffer will enhance bank stability. Furthermore, bank market power, revenue diversification, and size have a positive impact on boosting bank stability. Hence, this study offers insights into the role of capital buffer in supporting bank stability.

Original language	English
Pages (from-to)	55-67
Number of pages	13
Journal	Pertanika Journal of Social Sciences and Humanities
Volume	26
Issue number	August
Publication status	Published - Aug 2018

Keywords

Bank capital
Bank capital buffer
Bank stability

Cite this

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title = "Capital buffer for stronger bank stability: Empirical evidence from Indonesia{\textquoteright}s commercial banks",

abstract = "This study investigates the relationships between capital buffer and bank stability among commercial banks in Indonesia during the period 2001 to 2015. The scope of this study is before and after the 2007-2008 financial crisis and the implementation of Basel II and Basel III in Indonesia{\textquoteright}s banking sector. By using dynamic panel regression, the estimation indicates that improvement of the capital buffer will enhance bank stability. Furthermore, bank market power, revenue diversification, and size have a positive impact on boosting bank stability. Hence, this study offers insights into the role of capital buffer in supporting bank stability.",

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N2 - This study investigates the relationships between capital buffer and bank stability among commercial banks in Indonesia during the period 2001 to 2015. The scope of this study is before and after the 2007-2008 financial crisis and the implementation of Basel II and Basel III in Indonesia’s banking sector. By using dynamic panel regression, the estimation indicates that improvement of the capital buffer will enhance bank stability. Furthermore, bank market power, revenue diversification, and size have a positive impact on boosting bank stability. Hence, this study offers insights into the role of capital buffer in supporting bank stability.

AB - This study investigates the relationships between capital buffer and bank stability among commercial banks in Indonesia during the period 2001 to 2015. The scope of this study is before and after the 2007-2008 financial crisis and the implementation of Basel II and Basel III in Indonesia’s banking sector. By using dynamic panel regression, the estimation indicates that improvement of the capital buffer will enhance bank stability. Furthermore, bank market power, revenue diversification, and size have a positive impact on boosting bank stability. Hence, this study offers insights into the role of capital buffer in supporting bank stability.

KW - Bank capital

KW - Bank capital buffer

KW - Bank stability

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JO - Pertanika Journal of Social Sciences and Humanities

JF - Pertanika Journal of Social Sciences and Humanities

IS - August

ER -

Capital buffer for stronger bank stability: Empirical evidence from Indonesia’s commercial banks

Abstract

Keywords

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