Credit Risk-Taking and Capital Position: Evidence From Two-Stage Regression  

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Suhartono

Jenis: Article from Journal - ilmiah nasional - terakreditasi DIKTI
Dalam koleksi: Journal of Economics, Business, & Accountancy: ventura vol. 15 no. 1 (Apr. 2012), page 117-126.
Topik: Ex Ante Risk; Capital; Size; Inefficiency
Fulltext: 64-225-1-PB.pdf (149.1KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: VV5 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Research on credit risk and its relationship with capital in a company is important. This is because the information about such thing can be considered very beneficial. This study examines the relationship between risk and capital in Indonesia Banking Market. It tested whether bank credit risk taking is correlated with its capital position. In this study, risk and capital were based on accounting ratios. Data for the study were taken from Banks cope database for the period 2003 to 2008. A two-stage-Regression analysis was used to estimate the relationship. On the risk taking model, it is correlated with ex post risk, portion of loan loss provision to capital (RISKCAP), and ratio of net loans to asset (NLTA), and negatively to size and inefficiency. On the capital equation, there is negative relationship with risk taking but not with inefficiency. Asset size has negative impact on capital positions and profitable banks hold more capital. It is clear that risk taking is not influenced by capital and capital is negatively determined by risk taking. In short, the relationship between risk taking and capital is not two-way but one way.

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