Home / Special Issue / JSSH Vol. 26 (S) Aug. 2018 / JSSH-S0690-2018

 

Capital Buffer for Stronger Bank Stability: Empirical Evidence from Indonesia's Commercial Banks

Dwi Nastiti Danarsari, Viverita and Rofikoh Rokhim

Pertanika Journal of Social Science and Humanities, Volume 26, Issue S, August 2018

Keywords: Bank capital buffer, bank capital, bank stability

Published on: 26 June 2018

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.

ISSN 0128-7702

e-ISSN 2231-8534

Article ID

JSSH-S0690-2018

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