Open AccessBank Compliance Factors in Implementing Regulation Provisions on Bank Performance in Indonesia
Author(s) -
Safik Faozi,
Bambang Sudiyatno,
Elen Puspitasari,
Rr. Tjahjaning Poerwati
Publication year - 2022
Publication title -
academic journal of interdisciplinary studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.148
H-Index - 5
eISSN - 2281-3993
pISSN - 2281-4612
DOI - 10.36941/ajis-2022-0028
Subject(s) - business , market liquidity , asset quality , capital adequacy ratio , stock exchange , accounting , panel data , compliance (psychology) , asset (computer security) , corporate governance , financial system , finance , economics , profit (economics) , psychology , social psychology , computer security , computer science , econometrics , microeconomics
This study aims to examine the effect of legal compliance on the health of commercial banks and Islamic banks in Indonesia, to the extent that compliance with the provisions and standards set by Bank Indonesia has an impact on improving bank performance. This study uses micro banking data listed on the Indonesia Stock Exchange (IDX) for the period 2015- 2019. The data used is panel data that is tested in the relationship between measures of bank health legal compliance with indicators of capital, asset quality, management, earnings, and market risk sensitivity (CAMELS). The results of this study indicate that compliance with earnings and compliance with market risk sensitivity has a negative effect on bank performance, while compliance with liquidity has no effect on bank performance. Furthermore, three control variables used in this study, namely capital, asset quality, and corporate governance, were able to produce results as predicted.
Received: 19 August 2021 / Accepted: 6 November 2021 / Published: 3 January 2022