Related bank deposits: Good or bad for stability?

Achsanta, Aldy Fariz; Risfandy, Tastaftiyan; Pamungkas, Putra; Trinugroho, Irwan; Saheruddin, Herman

doi:10.1007/s40822-021-00184-3

Cited by 2 publications

(2 citation statements)

References 38 publications

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“…We also employ a set of control variables, following empirical research, that may influence propping. First, referring to Achsanta et al (2021) and Meslier et al (2017), we consider competition using the Lerner index, where the market power is the markup price above the marginal price. We expect it to have a negative effect on propping.…”

Section: Methodsmentioning

confidence: 99%

How Do Banks Set Their Propping Behavior Through Related Party Transactions During a Bail-In Regime? Evidence From an Emerging Market

Achsanta¹,

Pamungkas²,

Trinugroho³

et al. 2023

IJEM

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This study investigates the impact of the enactment of bail-in regimes in 2016 in Indonesia on bank owners' propping behavior. Based on Indonesian banking data for the period 2011–2020, we use the difference-in-differences method to examine whether related party transactions substantially increase or decrease after the introduction of bail-in as an indicator of propping. We find that while the requirement for sufficient capital allocated to shock absorbance increases, bank owners may provide capital via related deposits. These deposits are typically beneficial to bank stability, increase liquidity, and can act as a propping channel. However, the deposits are also more exposed to risks, and consequently decrease.

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Section: Methodsmentioning

confidence: 99%

How Do Banks Set Their Propping Behavior Through Related Party Transactions During a Bail-In Regime? Evidence From an Emerging Market

Achsanta¹,

Pamungkas²,

Trinugroho³

et al. 2023

IJEM

Self Cite

View full text Add to dashboard Cite

show abstract

“…Unfortunately, the Global Financial Crisis (GFC) that occurred in 2008 once again caused the customers' trust to decline (Atahau & Cronje, 2020; Probohudono et al, 2013). The GFC brought major impacts on loans, currency depreciation, and a contraction in non-oil and gas exports (Achsanta et al, 2021). Indonesian government has taken all necessary measures to strengthen IDIC (Jameaba, 2018).…”

Section: Introductionmentioning

confidence: 99%

Do customer knowledge and customer trust in IDIC affect bank customer retention? Evidence from Indonesia

Sembiring

2023

JED

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Purpose — The primary focus of this research was to examine the impact of customer knowledge and customer trust in Indonesia Deposit Insurance Corporation (IDIC) on the retention of bank customers in Indonesia.Method — The study employed a cross-sectional design and quantitative survey study. Questionnaires were distributed randomly to respondents via social media. 141 respondents from bank customers in Indonesia have been analyzed. Hypothesis testing is done by multiple linear regression analysis with structural equation modeling and SmartPLS as a statistical tool.Result — The results show that the average bank customer in Indonesia has sufficient knowledge about the role, function, task, and performance of IDIC. However, knowledge needs to be improved because some customers do not understand it well. The results provide empirical evidence that customer knowledge and customer trust in IDIC have positive influence on bank customer retention.Contribution — There is a new concept with the integration of two theories that will benefit future research. The findings contribute to addressing research gaps that have inconsistent results. The findings also contribute to improving customer knowledge and customer trust as a solution to the impact of the COVID-19 pandemic and the global financial crisis. This study supports the G20 in strengthening financial safety nets, where multilateral development banks are encouraged to strengthen their financing systems to face global economic challenges.

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Related bank deposits: Good or bad for stability?

Cited by 2 publications

References 38 publications

How Do Banks Set Their Propping Behavior Through Related Party Transactions During a Bail-In Regime? Evidence From an Emerging Market

How Do Banks Set Their Propping Behavior Through Related Party Transactions During a Bail-In Regime? Evidence From an Emerging Market

Do customer knowledge and customer trust in IDIC affect bank customer retention? Evidence from Indonesia

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