Indonesia: Anatomy of a Banking Crisis Two Years of Living Dangerously, 1997-99

140 Pages Posted: 29 Jan 2006

See all articles by Charles Enoch

Charles Enoch

International Monetary Fund (IMF)

Barbara Baldwin

affiliation not provided to SSRN

Olivier Frécaut

affiliation not provided to SSRN

Arto Kovanen

International Monetary Fund (IMF) - African Department

Date Written: May 2001

Abstract

This study looks at the first two years of the banking crisis that erupted in Indonesia in late 1997. It finds that the banking sector was weak at the outset, and that governance problems intensified the crisis and seriously delayed its resolution. Although a strategy was put in place over the initial months, protracted delays in implementation led to an explosion in the costs of resolution. By end-1999, the critical elements to reconstruct the banking system were in place, and the political transition seemed completed; but, in a continuing unsettled environment, the new authorities still faced daunting challenges.

Keywords: banking crisis, bank restructuring, blanket guarantee, lender of last resort, banking supervision

JEL Classification: G21, G28, G34, N25, O53

Suggested Citation

Enoch, Charles and Baldwin, Barbara and Frécaut, Olivier and Kovanen, Arto, Indonesia: Anatomy of a Banking Crisis Two Years of Living Dangerously, 1997-99 (May 2001). IMF Working Paper No. 01/52, Available at SSRN: https://ssrn.com/abstract=879456

Charles Enoch

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Barbara Baldwin

affiliation not provided to SSRN

No Address Available

Olivier Frécaut

affiliation not provided to SSRN

No Address Available

Arto Kovanen (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

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