Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
crossref
doi
open access

Published: 20 May 2022

The Macroeconomic-Based Systemic Risks and Bad Loans of Commercial Banks Listed in the Indonesian Capital Market

Helmi Setiawan Muhammad, Erie Febrian, Bram Hadianto

Padjadjaran University (Indonesia), Maranatha Christian University (Indonesia)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

Download Full-Text Pdf

doi

10.31014/aior.1992.05.02.414

Pages: 70-75

Keywords: Commercial Banks, Loan Risk, Systemic Macroeconomic Factors

Abstract

The risk is the probability of uncertain situations with the changes. In banks, this circumstance happens when they distribute credits to the parties needing the cash. In performing this intermediary function, the systemic risks related to macroeconomics are available: inflation and exchange rate (ER) of IDR/USD. Hence, this research objective is to investigate and analyze the impact of these systemic risks on non-performing loans. The population originates from the commercial banks in the capital market in Indonesia from 2009 until 2017. We apply the Slovin formula and a simple random sampling method to calculate and acquire the total representative samples. After the archival technique collects the data, we use the regression with pooled data to analyze them. This study demonstrates that systemic risk from the inflation rate positively affects non-performing loans; however, the ER of IDR/USD shows no effect.

References

  1. Ahmad, F., & Bashir, T. (2013). The explanatory power of macroeconomic variables as determinants of non-performing loans: Evidence from Pakistan. World Applied Sciences Journal, 22(2), 243-255.

  2. Benazic, M., & Radin, D. (2015). Macroeconomic determinants of the non-performing placements and off-balance sheet liabilities of Croatian Banks. Organizacija, 48(2), 75-87.

  3. Bowerman, B. L., & O'Connell. (2003). Business Statistics in Practice. New York: McGraw-Hill.

  4. Farhan, M., Sattar, A., Chaudhry, A. H., & Khalil, F. (2012). Economic determinants of non-performing loans: Perception of Pakistani bankers. European Journal of Business and Management, 4(19), 87-99.

  5. Festic, M., & Beko, J. (2008). The banking sector and macroeconomic performance in central European economies. Czech Journal of Economics and Finance, 58(3-4), 131-151.

  6. Firmansyah, I. (2014). Determinant of non-performing loan: The case of Islamic Banks in Indonesia. Bulletin of Monetary, Economics and Banking, 17(2), 251-267.

  7. Ghozali, I. (2016). Multivariate Analysis Application by IBM SPSS 23(8 ed.). Semarang: Badan Penerbit Universitas Diponegoro.

  8. Hernando, A., Miranda, E., Theodora, L. L. A., Kadarusman, Y. B., & Ariyan, G. A. (2020). The effect of macroeconomics factors on non-performing loans exists in the Indonesian productive commercial credit. Studi Akuntansi dan Keuangan Indonesia, 3(1), 1-28.

  9. Kamaludin, K., Darmansyah, D., & Usman, B. (2015). The determinant of non-performing loan in the banking industry: Empirical evidence from the banks listed on the Indonesian capital market. Jurnal Aplikasi Manajemen, 13(4), 547-556.

  10. Kasmir, K. (2014). Bank and other financial institutions. Jakarta: PT RajaGrafindo Persada.

  11. Kusmayadi, D., Firmansyah, I., & Badruzaman, J. (2017). The impact of macroeconomic on non-performing loans: Comparison study at conventional and Islamic banking. Iqtishadia: Jurnal Kajian Ekonomi dan Bisnis Islam, 10(2), 59-82.

  12. Linda, M. R., Megawati, M., & Deflinawati, D. (2015). The impact of inflation, exchange and interest rates on non-performing loan of PT Bank Tabungan Negara (Persero) Tbk in Padang. Economica: Jurnal Program Studi Pendidikan Ekonomi STKIP PGRI Sumatera Barat, 3(2), 137-144.

  13. Nabella, R. S., Maski, G., & Wahyudi, S. T. (2020). Systemic risk analysis using conditional value at tisk (CoVaR) model: Evidence in Indonesia. Jurnal Ekonomi dan Studi Pembangunan, 12(1), 57-67.

  14. Odusanya, I. A., Yinusa, O. G., & Ilo, B. M. (2018). Determinants of firm profitability in Nigeria: Evidence from dynamic panel models. SPOUDAI Journal of Economics and Business, 68(1), 43-58.

  15. Sukirno, S. (2016). Macroeconomics: The Introduction (3 ed.). Jakarta: Rajawali Press.

  16. Sunariyah, S. (2011). Introduction to Capital Market Knowledge (6 ed.). Yogyakarta: UPP AMP YKPN.

  17. Taswan, T. (2010). Banking Management: Concepts and Their Application(2 ed.). Yogyakarta: STIE YKPN.

  18. Valahzaghard, M. K., Kashefi, M., Alikhani, A., & Hosseini, S. E. (2012). The effect of macroeconomic factors on credit risk in the banking system of Iran. Management Science Letters, 2, 1747–1754.

  19. Veithzal, A. P., Sudarto, S., Basir, S., & Rivai, V. (2013). Commercial Bank Management: Banking Management from Theory to Practice. Depok: RajaGrafindo Persada.

  20. Wairimu, M., & Gitundu, E. (2017). Macroeconomic determinants of non-performing loans in Kenya: 1998-2015. Research Journal of Finance and Accounting, 8(4), 98-105.

  21. Warue, B. N. (2013). The effects of bank-specific and macroeconomic factors on non-performing loans in commercial banks in Kenya: A Comparative panel data analysis. Advances in Management & Applied Economics, 3(2), 135-164.

  22. Yam, J. H. (2016). Impact of macroeconomics and bank specifics on non-performing loans and banking sustainability performance. International Journal of Innovation and Applied Studies, 18(4), 972-989.