Indonesian Capital Market Review
Vol. 8, No. 2

Deposit Insurance and Bank Liquidity: Does Ownership Structure Matter?

Trinugroho, Irwan (Unknown)
Muthmainah, Muthmainah (Unknown)
Ariefianto, Mochammad Doddy (Unknown)
Sutaryo, Sutaryo (Unknown)

Article Info

Publish Date
30 Jul 2016

Abstract

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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Journal Info
Indonesian Capital Market Review
Website

Abbrev

publication:icmr

Publisher

Universitas Indonesia

Subject

Economics, Econometrics & Finance

Description

The intent of the Editors of The Indonesian Capital Market Review is to discuss, to explore, and to disseminate the latest issues and developments in Empirical Financial Economics particularly those related to financial frictions in the Emerging Markets. The topics cover capital markets, financial ...