LOAN RESTRUCTURING AND DEPOSIT GROWTH: EVIDENCE FROM THE MARKET DISCIPLINE DURING THE COVID-19 OUTBREAK

Indra Tumbelaka ()
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Indra Tumbelaka: Indonesia Financial Services Authority, Indonesia

Bulletin of Monetary Economics and Banking, 2025, vol. 28, issue 2, 199-216

Abstract: Amid the COVID-19 pandemic, banks boosted loan restructuring efforts to offer borrowers assistance and preserve credit quality. This study employs dynamic and static panel data from Indonesian commercial banks to include restructured loans as a metric for assessing market discipline prior to and during the pandemic. Depositors shown discipline about banks’ credit risk during the COVID-19 period and exhibited heightened sensitivity to restructured loans. Subsequent analysis indicates that the association between deposit growth and restructured loans was more pronounced in government, small, and publicly listed banks during the outbreak.

Keywords: Pandemic; Commercial banks; Indonesia (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:28:y:2025:i:2b:p:199-216

DOI: 10.59091/2460-9196.2167

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