WSEAS Transactions on Environment and Development
Print ISSN: 1790-507, E-ISSN: 2224-3496
Volume 19, 2023
The Present Role of Market Risks in the Financial Performance of Indonesian Banks Post-2007 Financial Crisis and Post-2016 Financial Technology Disruption
Authors: ,
Abstract: The 2007-8 financial crisis and the 2016 technology disruption have motivated investors to be more aware of the financial performance of the banks in Indonesia. This study attempts to examine the strength of market risk post the financial crisis and financial technology disruption. To our knowledge, this is the first study to examine the advancement of market risk in the Indonesian banking industry following the crisis and disruption. Literature has shown that the role of market risk in other countries accentuates after the crisis. Using panel data from forty-nine banks listed in the Indonesia stock exchange during the 2009 – 2020 period, this study concentrates on the role of Market Risk Indicators (MRIs) in financial performance. The findings suggest that MRIs alter the profitability indicators. The effect of MRIs becomes more robust as moving further away from 2007. Additionally, there is no evidence that NIM has become a tool to manage risk.
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Pages: 613-623
DOI: 10.37394/232015.2023.19.60