Bank Compliance Factors in Implementing Regulation Provisions on Bank Performance in Indonesia

Safik  Faozi; Bambang  Sudiyatno; Elen  Puspitasari; Rr Tjahjaning  Poerwati

doi:10.36941/ajis-2022-0028

Authors

Safik Faozi Universitas Stikubank (UNISBANK) Semarang, Jl. Tri Lomba Juang, Mugassari, Kec. Semarang Sel., Kota Semarang, Jawa Tengah 50241, Indonesia
Bambang Sudiyatno Universitas Stikubank (UNISBANK) Semarang, Jl. Tri Lomba Juang, Mugassari, Kec. Semarang Sel., Kota Semarang, Jawa Tengah 50241, Indonesia
Elen Puspitasari Universitas Stikubank (UNISBANK) Semarang, Jl. Tri Lomba Juang, Mugassari, Kec. Semarang Sel., Kota Semarang, Jawa Tengah 50241, Indonesia
Rr Tjahjaning Poerwati Universitas Stikubank (UNISBANK) Semarang, Jl. Tri Lomba Juang, Mugassari, Kec. Semarang Sel., Kota Semarang, Jawa Tengah 50241, Indonesia

DOI:

https://doi.org/10.36941/ajis-2022-0028

Keywords:

Asset quality, Capital, Earnings, Liquidity, Management, Market risk sensitivity

Abstract

This study aims to examine the effect of legal compliance on the health of commercial banks and Islamic banks in Indonesia, to the extent that compliance with the provisions and standards set by Bank Indonesia has an impact on improving bank performance. This study uses micro banking data listed on the Indonesia Stock Exchange (IDX) for the period 2015- 2019. The data used is panel data that is tested in the relationship between measures of bank health legal compliance with indicators of capital, asset quality, management, earnings, and market risk sensitivity (CAMELS). The results of this study indicate that compliance with earnings and compliance with market risk sensitivity has a negative effect on bank performance, while compliance with liquidity has no effect on bank performance. Furthermore, three control variables used in this study, namely capital, asset quality, and corporate governance, were able to produce results as predicted.

Received: 19 August 2021 / Accepted: 6 November 2021 / Published: 3 January 2022