DOES LOAN-TO-VALUE SUPPORT FINANCIAL STABILITY IN INDONESIA?

  • AGUS SALIM Department of Development Economics, Faculty of Economics and Business, Universitas Ahmad Dahlan, Special Region of Yogyakarta,
  • IGNATIUS ABASIMI School of Economics, Shandong University, Shandong, Jinan, China
  • LESTARI SUKARNIATI Department of Development Economics, Faculty of Economics and Business, Universitas Ahmad Dahlan, Special Region of Yogyakarta
  • NAVEED ASLAM University of Poonch, Rawalakot, Azad Kashmir, Pakistan
Keywords: loan-to-value, financial stability, macroprudential policy

Abstract

One of which is loan to value (LTV). The implementation helps to improve financial stability. Our study analyses the impact of LTV on banking financial stability. We employ panel GMM-System to reduce the bias of analysis for eighteen commercial banks from 2004 to 2019. The result shows that the LTV instrument confirms an improvement effect on the financial stability index. It implies that the more tighten policy on mortgage and vehicle loan, the more stable financial system especially in banking sector in Indonesia.

Published
2023-01-18
How to Cite
SALIM, A., ABASIMI, I., SUKARNIATI, L., & ASLAM, N. (2023). DOES LOAN-TO-VALUE SUPPORT FINANCIAL STABILITY IN INDONESIA?. JURNAL ILMIAH KOHESI, 7(1), 14-18. Retrieved from https://kohesi.sciencemakarioz.org/index.php/JIK/article/view/376
Issue
Vol 7 No 1 (2023): JURNAL ILMIAH KOHESI
Section
Articles