Indonesia Joint Recapitalization of 1999

26 Pages Posted: 13 Dec 2021

See all articles by Ariel Smith

Ariel Smith

Yale University - Yale Program on Financial Stability

Vaasavi Unnava

Yale School of Management - Program on Financial Stability; Bocconi University

Date Written: November 12, 2021

Abstract

The Indonesian government implemented a joint recapitalization program in 1999 to aid some of its private banks struggling with the effects of the Asian Economic Crisis. Nine banks were eligible, and seven ultimately participated. The program was voluntary; in order to participate, bank managers had to pass a test proving that they were competent enough to run their bank and create a three-year plan for the bank’s operations subject to independent assessment. All of the bank participants were able to return to the 4% minimum capital adequacy ratio by the end of the program.

Keywords: Asian Economic Crisis, Capital injection, Indonesia, liquidity nonperforming loans

JEL Classification: G01,G28

Suggested Citation

Smith, Ariel and Unnava, Vaasavi and Unnava, Vaasavi, Indonesia Joint Recapitalization of 1999 (November 12, 2021). The Journal of Financial Crises: Vol. 3 : Iss. 3, 169-193., Available at SSRN: https://ssrn.com/abstract=3981016

Ariel Smith

Yale University - Yale Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

Vaasavi Unnava (Contact Author)

Yale School of Management - Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

Bocconi University ( email )

Milano
Italy

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