IDEAS home Printed from https://ideas.repec.org/a/taf/rjapxx/v4y1999i2p258-297.html
   My bibliography  Save this article

Control and competition: Banking deregulation and re‐regulation in Indonesia

Author

Listed:
  • Ross McLeod

Abstract

Policy changes in Indonesian banking from 1983 to 1992 saw the removal of controls on interest rates, lending and expansion of branch networks, and of barriers to entry. The dismantling of loan subsidy programmes financed by the central bank ran in parallel with these changes. Private banks were enabled to erode rapidly the market share of the previously dominant, but less efficient and less customer‐oriented, state banks. Opponents of deregulation tend to blame it for Indonesia's persistent inflation in the early 1990s and for contributing to the currency crisis in 1997–98, but their arguments are found wanting. Nevertheless, despite the impressive progress resulting from reform, interventionist policy had been making a comeback prior to the crisis, and the central bank still maintained its role as a significant supplier of subsidized loans.

Suggested Citation

  • Ross McLeod, 1999. "Control and competition: Banking deregulation and re‐regulation in Indonesia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 4(2), pages 258-297.
    • Handle: RePEc:taf:rjapxx:v:4:y:1999:i:2:p:258-297
    DOI: 10.1080/13547869908724682
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13547869908724682
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13547869908724682?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. McLeod, Ross, 2002. "Privatisation Failures in Indonesia," Departmental Working Papers 2002-06, The Australian National University, Arndt-Corden Department of Economics.
    2. Ross H McLeod, 2003. "Rethinking vulnerability to currency crises: Comments on Athukorala and Warr," Departmental Working Papers 2003-11, The Australian National University, Arndt-Corden Department of Economics.
    3. Prasetyantoko, A. & Rosengard, Jay K., 2011. "If The Banks Are Doing So Well, Why Can’t I Get A Loan? Regulatory Constraints to Financial Inclusion in Indonesia," Scholarly Articles 8705903, Harvard Kennedy School of Government.
    4. George Fane & Ross H.McLeod, 2002. "Banking Collapse and Restructuring in Indonesia, 1997-2001," Cato Journal, Cato Journal, Cato Institute, vol. 22(2), pages 277-295, Fall.
    5. Gregory James & Michail Karoglou, 2010. "Financial liberalization and stock market volatility: the case of Indonesia," Applied Financial Economics, Taylor & Francis Journals, vol. 20(6), pages 477-486.
    6. Tri Mulyaningsih & Anne Daly, 2011. "Competitive Conditions In Banking Industry: An Empirical Analysis Of The Consolidation, Competition And Concentration In The Indonesia Banking Industry Between 2001 And 2009," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 14(2), pages 141-175, October.
    7. G. P. Manish & Colin O’Reilly, 2019. "Banking regulation, regulatory capture and inequality," Public Choice, Springer, vol. 180(1), pages 145-164, July.
    8. Ross McLeod, 1999. "Crisis-Driven Changes to the Banking Laws and Regulations," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 147-154.
    9. Ross H. McLeod, 2002. "Second and Third Thoughts on Privatisation in Indonesia," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 9(2), pages 151-164.
    10. Tri Mulyaningsih & Anne Daly & Riyana Miranti, 2015. "Managing the endogeneity problem of the market structure: a study on banking competition," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 7(2), pages 135-154, April.

    More about this item

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjapxx:v:4:y:1999:i:2:p:258-297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjap .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.