Interventions in Banks During Banking Crises: The Experience of Indonesia

March 1, 2000

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Charles Enoch. Interventions in Banks During Banking Crises: The Experience of Indonesia, (USA: International Monetary Fund, 2000) accessed December 26, 2024

Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Interventions in banks are often an integral element of a government’s program for addressing a systemic banking crisis. Interventions may be warranted because the banks are deeply insolvent or riddled with fraud; they may be requiring substantial liquidity support. In some circumstances closures may be more effective than open bank resolution. There were four major sets of bank closures in Indonesia between November 1997 and March 1999. The initial closures were subject to criticism, but the more recent ones were viewed more positively. This paper looks at these experiences, and draws conclusions about closing banks in a systemic crisis.

Subject: Asset and liability management, Bank resolution, Banking, Banking crises, Blanket guarantee, Commercial banks, Financial crises, Financial institutions, Liquidity

Keywords: Asia and Pacific, Bank, Bank closure, Bank resolution, Bank resolution package, Bank resolution procedure, Bank restructuring program, Bank takeover, Banking crises, Banking crisis, Banks, Banks understanding, Blanket guarantee, BTO bank, Central Asia, Closed bank, Commercial banks, Government, Government support, IBRA, Indonesia, Intervened bank, Liquidity, Open bank resolution, PDP, State bank, Taken-over bank

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Policy Discussion Paper No. 2000/002
Stock No:

PPIEA0022000
ISBN:

9781451974461
ISSN:

1564-5193

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