The Regulation of Foreign Ownership of National Banks in Indonesia and Its Impact on National Development

DOI

10.2991/978-2-38476-218-7_5How to use a DOI?

Keywords

Banking Ownership; Economic Analysis of Law; International Agreement; Liberalization

Abstract

International agreements make Indonesia liberalize the financial sector. As a result, foreign ownership of national banks in Indonesia has dominated the shares of banks that have gone public. Even though market mechanisms should be the key to healthy competition in liberalizing national bank ownership in Indonesia, the readiness of local investors to compete with foreign investors still needs to be improved. This research aims to show the impact of the foreign monopoly on national banks’ ownership to achieve long-term national development targets. This research uses normative juridical research methods with a conceptual and statutory approach. As an analytical tool, Richard Posner’s antitrust theory will show the negative impact of the national banks’ liberalization in Indonesia. This policy will impact the stability and future development of the national financial sector. The result shows that the liberalization policy at least brought about (1) domination of foreign ownership, (2) lack of ability of domestic investors to compete with foreign investors, (3) there needs to be an evaluation of the motivation of foreign investors in Indonesia, (4) dominance in determining the direction of national bank policy is in the hands of foreign investors, (5) there need to be adjustments to standards that can ensure that investor policies are in line with the direction of Indonesian national policy. Thus, this research can provide a new perspective in looking at the direction of economic sector liberalization policies that are fair to all Indonesian people.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ashinta Sekar Bidari
AU  - Pujiyono Suwadi
AU  - Yudho Taruno Muryanto
PY  - 2024
DA  - 2024/02/22
TI  - The Regulation of Foreign Ownership of National Banks in Indonesia and Its Impact on National Development
BT  - Proceedings of the International Conference On Law, Economic & Good Governance (IC-LAW 2023)
PB  - Atlantis Press
SP  - 24
EP  - 29
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-218-7_5
DO  - 10.2991/978-2-38476-218-7_5
ID  - Bidari2024
ER  -