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Government intervention, bank ownership and risk-taking during the Indonesian financial crisis
Journal article   Open access   Peer reviewed

Government intervention, bank ownership and risk-taking during the Indonesian financial crisis

A. Agusman, G. Cullen, D. Gasbarro, G.S. Monroe and J.K. Zumwalt
Pacific-Basin Finance Journal, Vol.30, pp.114-131
2014
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Abstract

The 1997/98 financial crisis forced the Indonesian government to inject capital into selected banks, introduce deposit insurance and change capital requirements. This study investigates the relation between highly concentrated ownership and bank risk-taking using a sample of 52 insured private commercial Indonesian banks during the 1995-2003 period. For restructured banks, ownership concentration is positively related to overall risk, and negatively related to credit and liquidity risk, especially during the relaxed capital adequacy requirement period. Liquidity risk is reduced when the government and owners contribute additional capital, and credit risk is lowered as the government removes bad loans from problematic banks.

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#1 No Poverty
#8 Decent Work and Economic Growth
#9 Industry, Innovation and Infrastructure
#10 Reduced Inequalities

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Collaboration types
Domestic collaboration
International collaboration
Citation topics
6 Social Sciences
6.10 Economics
6.10.82 Finance-Growth Nexus
Web Of Science research areas
Business, Finance
ESI research areas
Economics & Business
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