ABSTRACT: The capital was
important to the banks as a buffer against possible losses. For this reason, in
1988 the Bank for International Settlements (BIS) issued a draft capital
framework known as the 1988 Basel Accord (Basel I). The purpose of this
investigation is to find out the impact of Basel I implementation on capital
and credit risk of Indonesian banking over the 2000–2004 period. Based on
previous studies, the impact of Basel I was performed by banking behaviour on
target capital and target credit risk which is represented by two variable
categories, they are bank-specific variable and macroeconomic variable.
Bank-specific variables consist of the size of bank, a measure of its asset
quality, a measure of its liquidity, and a measure of its profitability whether
the macroeconomic condition is represented by the growth of GDP. This research
uses a simultaneous equation to analyze adjustments in capital and credit risk.
The result estimation of simultaneous equation, were provides evidence, that
Basel I has no impact on banking capital and credit risk for well-capitalized
banks. This implies that Basel I implementation can not influence banks to
change their capital either to improve their credit risk portfolio.
Keywords: Basel I, Capital,
Credit Risk, and Portofolio
Penulis: Ghozali Maski
Kode Jurnal: jpmanajemendd110025
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