Abstract
This study examines the impact of bank capital buffer on bank cost efficiency. The sample contains Indonesia's commercial conventional banks during the period of 2001 to 2015. Using the Stochastic Frontier Analysis (SFA) for estimating bank cost efficiency and the dynamic panel regression, the result suggest that an incremental in capital buffer affects changes in bank efficiency positively. In related to policy implication, the outcome indicates that holding a large level of capital does not disrupt bank cost efficiency. Thus, the result of this study become a signal from banking sector regarding readiness to comply with the capital regulation, including Basel III.
| Original language | English |
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| Publication status | Published - 2017 |
| Event | International Conference on Finance, Management and Business (ICFMB) - ID, Jakarta, Indonesia Duration: 1 Jan 2017 → … |
Conference
| Conference | International Conference on Finance, Management and Business (ICFMB) |
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| Country/Territory | Indonesia |
| City | Jakarta |
| Period | 1/01/17 → … |
Keywords
- Bank capital; capital buffer; bank efficiency.