Loan Restructuring and Deposit Growth: Evidence from the Market Discipline during the COVID-19 Outbreak

Authors

Indra Tumbelaka, Financial Services Authority of IndonesiaFollow

Document Type

Article

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

Recommended Citation

Tumbelaka, Indra (2025) "Loan Restructuring and Deposit Growth: Evidence from the Market Discipline during the COVID-19 Outbreak," Bulletin of Monetary Economics and Banking: Vol. 28: No. 2, Article 2.
DOI: https://doi.org/10.59091/2460-9196.2167
Available at: https://bulletin.bmeb-bi.org/bmeb/vol28/iss2/2

First Page

199

Last Page

216

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

Financial Services Authority of Indonesia