The Boom, Bust and Restructuring of Indonesian Banks

April 1, 2002

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Mari Pangestu, and Manggi Habir. The Boom, Bust and Restructuring of Indonesian Banks, (USA: International Monetary Fund, 2002) accessed December 22, 2024

Disclaimer: This Working 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

This paper studies why currency and monetary shock hit Indonesia's economy and banking sector so severely and the measures that were taken to deal with the banking crisis, the lessons learned, and challenges faced in restructuring and strengthening the banking system. The vulnerable state of the banking sector, in combination with exchange rate and interest rate shocks, led to a systemic banking crisis. The priorities for bank restructuring are to complete the separation of nonviable from viable banks, recoup losses, implement new rules and regulations, and develop an incentive-based system for the consolidation of banks.

Subject: Bank credit, Bank resolution, Banking, Commercial banks, Financial crises, Financial institutions, Foreign banks, Loans, Nonperforming loans

Keywords: Asian financial crisis, Bank Central Asia, Bank closure, Bank Danamon, Bank Indonesia, Bank Putera, Bank resolution, Bank restructuring, Bank restructuring program, Banking reforms, C bank, Central Asia, Central bank, Commercial banks, Commercial paper, Community bank, Development bank, East Asia, Foreign banks, Foreign exchange, Indonesia, Liquidity support, Loans, Nonperforming loans, Recapitalized bank, Thirty-eight bank, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/066
Stock No:

WPIEA0662002
ISBN:

9781451848809
ISSN:

1018-5941

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