The Political Openness of Banking System, Political Governance, Law Enforcement and Cost of Banking Crisis: Indonesia in the International Perspective
32nd Annual Conference of the Federation of ASEAN Economist Association FAEA, Bangkok, 7-8 December, 2007
21 Pages Posted: 26 Feb 2018
Date Written: December 7, 2007
The recent banking crises in Asia and Latin America have raised a question on the cost of banking crisis. The Asian crisis resulted in the virtual collapse of Indonesia’s financial system. Most of the banks that dominated the system were pushed into insolvency, while the ratio of problem loans (NPLs) to total lending may have reached as high as 80%. Moreover, almost all countries experience banking crisis. The study try to investigate the impact of political governance, openness policy on foreign ownership and legal system within political crisis situation on the cost of banking crisis. It is very clear indecisive policy has made the cost of crisis increase dramatically.
Keywords: Banking crisis, liberalization, Cost of banking and political crisis
JEL Classification: G21, G32
Suggested Citation: Suggested Citation