The Boom, Bust and Restructuring of Indonesian Banks
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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.
Series:
Working Paper No. 2002/066
Subject:
Bank credit Bank resolution Banking Commercial banks Financial crises Financial institutions Foreign banks Loans Nonperforming loans
English
Publication Date:
April 1, 2002
ISBN/ISSN:
9781451848809/1018-5941
Stock No:
WPIEA0662002
Pages:
35
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