The Influence of Liquidity and Deposit Insurance on Market Discipline at Regional Development Bank in Indonesia

Syarief Fauzie, M. Deni Rahman Sitepu

2018

Abstract

The purpose of this study is to determine the effect of liquidity on the influence of overhead, short term debt, inflation and regional growth of gross domestic product on deposit growth and interest rates as market discipline variables. In the research also use dummy variable in the form of policy of deposit insurance either implicitly or explicitly by Government of Indonesia as variable which moderate influence of liquidity to growth of deposit and interest rate. This study used 19 regional development banks in the region during the period of 2002-2014. In testing the influence of independent variable to dependent variable, this research use multiple linear regression fixed effect model. While the data in this research is secondary data sourced from annual report published by Bank Indonesia. The results show that liquidity is a variable that can mediate the influence of short term debt and regional growth of gross domestic product on the growth of deposits and also can mediate the influence of overhead, short term debt, inflation and regional growth of gross domestic product against interest rate. The results also show that the implementation of the deposit insurance policy explicitly is a variable that strengthens the effect of liquidity on deposit growth and interest rate.

Paper Citation

in Harvard Style

Fauzie S. and Sitepu M. (2018). The Influence of Liquidity and Deposit Insurance on Market Discipline at Regional Development Bank in Indonesia.In Proceedings of the 7th International Conference on Multidisciplinary Research - Volume 1: ICMR, ISBN 978-989-758-437-4, pages 706-714. DOI: 10.5220/0008892807060714

in Bibtex Style

@conference{icmr18,
author={Syarief Fauzie and M. Deni Rahman Sitepu},
title={The Influence of Liquidity and Deposit Insurance on Market Discipline at Regional Development Bank in Indonesia},
booktitle={Proceedings of the 7th International Conference on Multidisciplinary Research - Volume 1: ICMR,},
year={2018},
pages={706-714},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0008892807060714},
isbn={978-989-758-437-4},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 7th International Conference on Multidisciplinary Research - Volume 1: ICMR,
TI - The Influence of Liquidity and Deposit Insurance on Market Discipline at Regional Development Bank in Indonesia
SN - 978-989-758-437-4
AU - Fauzie S.
AU - Sitepu M.
PY - 2018
SP - 706
EP - 714
DO - 10.5220/0008892807060714