IDEAS home Printed from https://ideas.repec.org/a/taf/bindes/v55y2019i1p1-27.html
   My bibliography  Save this article

Risks, Resilience, and Reforms: Indonesia’s Financial System in 2019

Author

Listed:
  • Adam Triggs
  • Febrio Kacaribu
  • Jiao Wang

Abstract

Indonesia has managed the complex challenges of the global economy well. The country's capital outflows were smaller in 2018 than during the Taper Tantrum in 2013; the rupiah had regained most of its lost ground by January 2019; the Indonesian stock market has outperformed its peers; growth is forecast to remain stable; inflation is low; unemployment remains below its five-year average; consumer and business confidence are robust; and the government budget has improved through a smaller deficit and cheaper borrowing costs. But significant risks remain. This paper assesses these risks and evaluates the adequacy of Indonesia's crisis management framework. It finds that the framework has serious deficiencies that could see liquidity challenges become systemic solvency crises. The framework effectively removes Bank Indonesia as the lender of last resort, risks politicising the process of crisis response, and could mean slower, less effective responses to crises. This paper explores how the framework could be improved and what reforms could be undertaken to deepen Indonesia's financial system, strengthen financial resilience, and boost the long-term growth outlook.

Suggested Citation

  • Adam Triggs & Febrio Kacaribu & Jiao Wang, 2019. "Risks, Resilience, and Reforms: Indonesia’s Financial System in 2019," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 55(1), pages 1-27, January.
    • Handle: RePEc:taf:bindes:v:55:y:2019:i:1:p:1-27
    DOI: 10.1080/00074918.2019.1592644
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00074918.2019.1592644
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00074918.2019.1592644?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gupta, Krisna & Gretton, Paul & Patunru, Arianto, 2022. "Projecting the long run impact of an economic reform: the case of the Indonesian Omnibus Law and concurrent changes in trade policy," Conference papers 333472, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Muhammad Afdi Nizar & Alfan Mansur, 2023. "Can the Indonesian banking industry benefit from a risk-based deposit insurance system?," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 16(1), pages 177-196, January.
    3. Xiaohui Chen & Yiqing He, 2022. "The Impact of Financial Resilience and Steady Growth on High-Quality Economic Development—Based on a Heterogeneous Intermediary Effect Analysis," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    4. Gupta, Krisna, 2019. "Modeling the Importance of Financial Liberalization to Indonesia's Economic Growth," Conference papers 333064, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Hao Dong & Tao Li, 2023. "Climate Economics and Finance: A Literature Review," Climate Economics and Finance, Anser Press, vol. 1(1), pages 29-45, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:55:y:2019:i:1:p:1-27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CBIE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.