Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia
This research aims to examine the impact of common equity tier 1 ratio (CET), loan to deposit ratio (LDR), leverage ratio (LR), interconnection ratio (INR) and on stability financial that measured from credit growth rate (CGR) in Indonesia. Data in this study used secondary data with a time series...
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| Format: | Article |
| Language: | English |
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Fakultas Ekonomi Universitas Sriwijaya
2025-07-01
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| Series: | Sriwijaya International Journal of Dynamic Economics and Business |
| Online Access: | https://sijdeb.unsri.ac.id/index.php/SIJDEB/article/view/745 |
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| author | Alghifari Mahdi Igamo Deassy Apriani Gustriani Halia Butra Aini |
| author_facet | Alghifari Mahdi Igamo Deassy Apriani Gustriani Halia Butra Aini |
| author_sort | Alghifari Mahdi Igamo |
| collection | DOAJ |
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This research aims to examine the impact of common equity tier 1 ratio (CET), loan to deposit ratio (LDR), leverage ratio (LR), interconnection ratio (INR) and on stability financial that measured from credit growth rate (CGR) in Indonesia. Data in this study used secondary data with a time series of Jan 2012 – Dec 2022 using the Vector Error Correction Model (VECM) method. The estimation results show that variables that have a significant relationship to financial system stability in the short term are LDR and CET variables. In long term results, there is a positive relationship between LDR and CGR. For a given level of risk, having more capital can in principle imply greater stability. Common Equity Tier 1 (CET1) assess bank resilience to adverse economic situations and maintain the stability of the financial system.
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| format | Article |
| id | doaj-art-8d6bcd2435024a1394a0588e573a5f13 |
| institution | Kabale University |
| issn | 2581-2904 2581-2912 |
| language | English |
| publishDate | 2025-07-01 |
| publisher | Fakultas Ekonomi Universitas Sriwijaya |
| record_format | Article |
| series | Sriwijaya International Journal of Dynamic Economics and Business |
| spelling | doaj-art-8d6bcd2435024a1394a0588e573a5f132025-08-20T03:31:46ZengFakultas Ekonomi Universitas SriwijayaSriwijaya International Journal of Dynamic Economics and Business2581-29042581-29122025-07-019110.29259/sijdeb.v9i1.81-94Examining Common Equity Tier 1 Ratio on Financial Stability in IndonesiaAlghifari Mahdi Igamo0Deassy Apriani1Gustriani2Halia Butra Aini3(SCOPUS ID: 57218391708) Universitas Sriwijaya, IndonesiaUniversitas SriwijayaUniversitas SriwijayaUniversitas Sriwijaya This research aims to examine the impact of common equity tier 1 ratio (CET), loan to deposit ratio (LDR), leverage ratio (LR), interconnection ratio (INR) and on stability financial that measured from credit growth rate (CGR) in Indonesia. Data in this study used secondary data with a time series of Jan 2012 – Dec 2022 using the Vector Error Correction Model (VECM) method. The estimation results show that variables that have a significant relationship to financial system stability in the short term are LDR and CET variables. In long term results, there is a positive relationship between LDR and CGR. For a given level of risk, having more capital can in principle imply greater stability. Common Equity Tier 1 (CET1) assess bank resilience to adverse economic situations and maintain the stability of the financial system. https://sijdeb.unsri.ac.id/index.php/SIJDEB/article/view/745 |
| spellingShingle | Alghifari Mahdi Igamo Deassy Apriani Gustriani Halia Butra Aini Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia Sriwijaya International Journal of Dynamic Economics and Business |
| title | Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia |
| title_full | Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia |
| title_fullStr | Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia |
| title_full_unstemmed | Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia |
| title_short | Examining Common Equity Tier 1 Ratio on Financial Stability in Indonesia |
| title_sort | examining common equity tier 1 ratio on financial stability in indonesia |
| url | https://sijdeb.unsri.ac.id/index.php/SIJDEB/article/view/745 |
| work_keys_str_mv | AT alghifarimahdiigamo examiningcommonequitytier1ratioonfinancialstabilityinindonesia AT deassyapriani examiningcommonequitytier1ratioonfinancialstabilityinindonesia AT gustriani examiningcommonequitytier1ratioonfinancialstabilityinindonesia AT haliabutraaini examiningcommonequitytier1ratioonfinancialstabilityinindonesia |