Early Warning Early Action for the Banking Solvency Risk in the COVID-19 Pandemic Era: A Case Study of Indonesia

Hidayat, Taufiq and Masyita, Dian and Nidar, Sulaeman Rahman and Ahmad, Fauzan and Syarif, Muhammad Adrissa Nur (2021) Early Warning Early Action for the Banking Solvency Risk in the COVID-19 Pandemic Era: A Case Study of Indonesia. Economies, 10 (1). p. 6. ISSN 2227-7099

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Abstract

The COVID-19 pandemic has affected people’s lives and increased the banking solvency risk. This research aimed to build an early warning and early action simulation model to mitigate the solvency risk using the system dynamics methodology and the Powersim Studio 10© software. The addition of an early action simulation updates the existing early warning model. Through this model, the effect of policy design and options on potential solvency risks is known before implementation. The trials conducted at Bank BRI (BBRI) and Bank Mandiri (BMRI) showed that the model had the ability to provide an early warning of the potential increase in bank solvency risk when the loan restructuring policy is revoked. It also simulates the effectiveness of management’s policy options to mitigate these risks. This research used publicly accessible banking data and analysis. Bank management could also take advantage of this model through a self-stimulation facility developed in this study to accommodate their needs using the internal data.

Item Type: Article
Subjects: Science Repository > Multidisciplinary
Depositing User: Managing Editor
Date Deposited: 28 Jun 2023 04:08
Last Modified: 20 Oct 2023 03:53
URI: http://research.manuscritpub.com/id/eprint/2512

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