Credit Growth and Bank Soundness in ASEAN
Christine Juliana Hakim (a*), Rofikoh Rokhim (b)
a) Graduate Program of Management, Faculty of Economic and Business, Universitas Indonesia, Salemba Raya, Indonesia
b) Department of Management, Faculty of Economic and Business, Universitas Indonesia, Salemba Raya, Indonesia
Abstract
The soundness of the bank can describe the ability of a bank in dealing with various potential risks that may be put in the bank at default. The study examines the significant impact of the credit growth that occurred in ASEAN during 2013-2017 towards banking health. Measurement of this paper using empirical tests using panel data regression with fixed effect technique. The result shows that credit growth in ASEAN does not affect the health of the banking industry. Meanwhile, there was another independent variable that affected bank soundness such as loan to deposit, the business model of the bank and bank capitalization.
Keywords: Credit growth, bank soundness, ASEAN
Topic: Finance