Banking fragility and financial crisis: evidence from Southeast Asia / Norashikin Ismail... [et al.]

Ismail, Norashikin and Md Isa, Mohamad Azwan and Mazlan, Nurul Farhana and Abd Rahman, Nor Hadaliza (2019) Banking fragility and financial crisis: evidence from Southeast Asia / Norashikin Ismail... [et al.]. Insight Journal : International, Refereed, Open Access, Online Journal, 3 (12). pp. 149-160. ISSN 2600-8564

Abstract

Throughout the 17 years of study period, the Southeast Asian countries were faced with three forms of financial crises namely Asian financial crisis, subprime crisis and currency crisis. Previous literatures have evidenced that banking fragility has been closely associated with financial crisis.
Hence, this paper aims to construct the banking sector fragility index (BSFI) during the different forms of crises. Three Southeast Asian countries were selected based on their common economic fundamentals and top three largest gross domestic product (GDP) per capita i.e. Indonesia, Thailand
and Malaysia which were studied from the year 2000 to 2016. The results indicate the Indonesian and Thailand banking sectors were seriously fragile after the Asian financial crisis (1997-1999). However, the fragility of banking sectors for these countries including Malaysia had diminished during the subprime crisis (2008-2009). Worst scenario repeated for the Indonesian banking sector when the currency crisis emerged in early 2014. Similarly, Malaysian banking sector confronted the worst level of fragility for the country following the depreciation of Malaysian ringgit against the US dollar at the
end of 2014 to early 2015. This study shows that the three countries’ banking sectors have responded differently to the three forms of financial crises.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Ismail, Norashikin
UNSPECIFIED
Md Isa, Mohamad Azwan
UNSPECIFIED
Mazlan, Nurul Farhana
UNSPECIFIED
Abd Rahman, Nor Hadaliza
UNSPECIFIED
Contributors:
Contribution
Name
Email / ID Num.
Chief Editor
Zainon, Assoc. Prof Dr. Saunah
UNSPECIFIED
Editor
Raja Ahmad, Assoc. Prof Dr. Raja Adzrin
UNSPECIFIED
Editor
Soo, Assoc. Prof. Dr. Carolyn Kum Yoke
UNSPECIFIED
Editor
Kadri, Assoc. Prof. Dr Mohd Halim
UNSPECIFIED
Editor
Mohd Ariff, Assoc. Prof. Dr. Intan Safinas
UNSPECIFIED
Editor
Ismail, Dr. Noriah
UNSPECIFIED
Editor
Khairani, Dr. Noor Sufiawati
UNSPECIFIED
Editor
Othman, Dr. Akmal Aini
UNSPECIFIED
Editor
Ismail, Dr. Norashikin
UNSPECIFIED
Editor
Ahmad, Dr. Syahrul Ahmar
UNSPECIFIED
Editor
Misman, Dr. Faridah Najuna
UNSPECIFIED
Subjects: H Social Sciences > HB Economic Theory. Demography > Business cycles. Economic fluctuations. Economic indicators > Finance and cycles. Financial crises. Convergence (Economics)
H Social Sciences > HG Finance > Banking > Special classes of banks and financial institutions
Divisions: Universiti Teknologi MARA, Johor > Segamat Campus
Journal or Publication Title: Insight Journal : International, Refereed, Open Access, Online Journal
UiTM Journal Collections: UiTM Journal > INSIGHT Journal (IJ)
ISSN: 2600-8564
Volume: 3
Number: 12
Page Range: pp. 149-160
Related URLs:
Keywords: BSFI; Banking fragility; financial crisis; Southeast Asia; UiTM Cawangan Johor
Date: 2019
URI: https://ir.uitm.edu.my/id/eprint/41803
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