Do Basel II Accord Classification Inline With Bank Performance?

Mahadwartha, Putu Anom and Ernawati, Endang and Sutejo, Bertha Silvia (2012) Do Basel II Accord Classification Inline With Bank Performance? In: Proceeding The 9th International Annual Symposium On Management: Innovation and Best Practices in Business Management: " How to Enhance Organizational Effectiveness on Free Trade Area in Asia?". Departement of Management, Faculty of Business and Economics Universitas Surabaya, Surabaya, p. 24. ISBN 978-979-99365-6-1

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The effect of bank's obedience to bank's performance is an interesting topic that useful to regulator, investors, shareholders, depositors, and debt holders. This research argues that obedience categorization will differentiate their financial performance. Main purposes of this research is to investigate whether research categorization of bank's obedience will leads to their financial performance. The other purpose is to test the use of CAMEL as bank's roles that state as systemic risk regulation, in ensure their roles support the goals of each profit oriented firms or banks to generate profits. This research limits its analysis only for banks with their roles that support the need for stabilize systemic risk. Samples are banks that listed on Bursa Efek Indonesia (Indonesian Capital Market) from 2000 until 2010. This research uses Bank Indonesia data especially news, and market report on Basel II implementation. There are two categorization of variable which are dependent and independent variables. The dependent variable is financial performance that proxy with accumulated return for a year using monthly data (MVE). This research also uses two measurement of Basel II Accord especially Pillar l of Basel II Accord. Indonesian central banks implemented Basel II Accord to all banks that operate in Indonesia territory. This research finds that the implementation of Basel II on banks, will force banks to increase their credit worthiness not only their credit quality. Banks will have to decrease their risk which means lower return as well. The weight risk factor on creditor creditworthiness will classify in keen category therefore banks will have difficulties in categorized their creditor. Trade finance between exporter and importer also become higher especially on forfaiting scheme. Forfaiting firms will have to charge higher fees and banks will have lowered their return. However, their overall risk will be much lower on such conditions.

Item Type: Book Section
Uncontrolled Keywords: Bank's Obidience, Financieal Performance, CAMEL, BASEL II
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Faculty of Business and Economic > Department of Management
Depositing User: Ester Sri W. 196039
Date Deposited: 15 Oct 2020 07:20
Last Modified: 15 Oct 2020 07:20

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