Economics at your fingertips  

Deposit structure, market discipline, and ownership type: Evidence from Indonesia

Irwan Trinugroho, Putra Pamungkas, Mochammad Doddy Ariefianto and Amine Tarazi

Economic Systems, 2020, vol. 44, issue 2

Abstract: In this paper, we extend the literature on the discipline imposed by depositors on banks by disentangling the impact of macro risk and micro risk. We also take advantage of a unique dataset in which depositors are split into different categories of deposit size in different types of banks (bank ownership structure). We consider the Banking Stability Index, which is used by the Indonesia Deposit Insurance Corporation as a dashboard to monitor banking stability at the country level as well as individual stability measures such as the Z-score. Using monthly data from 2005 to 2013, our findings show that both macro and micro levels of risk are considered by depositors to discipline banks. Large uninsured depositors are more effective at disciplining banks, highlighting the credibility of the insurance system that is in place. Bank ownership type also matters in explaining the difference in market discipline by depositors.

Keywords: Deposit structure; Market discipline; Banking stability index; Ownership; Indonesia (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Deposit Structure, Market Discipline, and Ownership Type: Evidence from Indonesia (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.ecosys.2020.100758

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Haili He ().

Page updated 2021-01-20
Handle: RePEc:eee:ecosys:v:44:y:2020:i:2:s0939362518304692