PERANAN THE LENDER OF LAST RESORT (LOLR) TERHADAP PEREKONOMIAN: Suatu Kajian Empiris Terhadap Bantuan Likuiditas Bank Indonesia (BLBI)

Authors

Iman Sugema
Iskandar Simorangkir

Document Type

Article

Abstract

The role of central bank as the lender of last resort (LOLR) has been well known since 19th century. LOLR is a lending facility to non liquid bank to avoid systemic financial crisis on banking. In Indonesia Central Bank of Indonesia provides this facility, namely Bantuan Likuiditas Bank Indonesia (BLBI). Using macro-econometric model to run two simulations; with and without BLBI, we find that BLBI can avoid national output fall while the existence of BLBI, the cost of liquidity crisis will be less. Our result also shows that BLBI tend to overshoot exchange rate by money printing to support non liquid bank which in turn increase the probability of systemic crisis.

Recommended Citation

Sugema, Iman and Simorangkir, Iskandar (2004) "PERANAN THE LENDER OF LAST RESORT (LOLR) TERHADAP PEREKONOMIAN: Suatu Kajian Empiris Terhadap Bantuan Likuiditas Bank Indonesia (BLBI)," Bulletin of Monetary Economics and Banking: Vol. 7: No. 1, Article 2.
DOI: https://doi.org/10.21098/bemp.v7i1.98
Available at: https://bulletin.bmeb-bi.org/bmeb/vol7/iss1/2

First Page

53

Last Page

88

Creative Commons License

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

Country

Indonesia

Affiliation

Bank Indonesia