Deposit Insurance and Bank Liquidity: Does Ownership Structure Matter?
Indonesian Capital Market Review
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Title |
Deposit Insurance and Bank Liquidity: Does Ownership Structure Matter?
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Creator |
Irwan Trinugroho; Faculty of Economics and Business, Universitas Sebelas Maret
Muthmainah Muthmainah; Faculty of Economics and Business, Universitas Sebelas Maret Mochammad Doddy Ariefianto; Indonesia Deposit Insurance Corporation Sutaryo Sutaryo; Faculty of Economics and Business, Universitas Sebelas Maret Agung Nur Probohudono; Faculty of Economics and Business, Universitas Sebelas Maret |
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Subject |
Deposit Insurance; Insurance Coverage; Bank Liquidity; Ownership; Indonesia
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Description |
We examine how the level deposit insurance coverage affects bank liquidity. We also test the role of ownership in the relationship between deposit insurance coverage and bank liquidity. This study uses quarterly data of Indonesian banks from Q1:2002 - Q2:2008. We argue that the presence of explicit deposit insurance changes a bank‘s behavior in liquidity management in the form of decreasing asset liquidity. We find some evidence on the negative impact of deposit insurance coverage on bank liquidity. However, little is found on the role of ownership structure. The credibility of deposit insurance system and implicit guarantee are the main policy implications.
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Publisher |
Management Research Center, Department of Management, Faculty of Economics and Business, U
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Contributor |
—
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Date |
2016-07-30
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Type |
Peer-reviewed Article
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Format |
application/pdf
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Identifier |
http://journal.ui.ac.id/index.php/icmr/article/view/6037
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Source |
Indonesian Capital Market Review; Vol 8, No 2 (2016): July 2016; 59-71
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Language |
en
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