The Effects of Capital Adequacy, Credit Risk, and Liquidity Risk on Banks’ Financial Distress in Indonesia

DOI

10.2991/aebmr.k.210507.059How to use a DOI?

Keywords

capital adequacy, credit risk, liquidity risk, banks’ financial distress

Abstract

The ongoing Covid-19 pandemic has caused many companies that cannot adapt to have difficulty in running their business. Banking as a financial intermediary institution has no exception to be affected by this pandemic. When the number of non-performing loan increases and credit distribution decreases, the banks’ profits are reduced, which then will cause financial distress. This study aimed to determine the effects of capital adequacy, credit risk, and liquidity risk on banks’ financial distress. Using the logit regression equation, the results show that the variables of credit risk and liquidity risk have positive and significant effects on banks’ financial distress, while the capital adequacy has a negative and not significant effect on banks’ financial distress.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Margarita Ekadjaja
AU  - Halim Putera Siswanto
AU  - Agustin Ekadjaja
AU  - Rorlen Rorlen
PY  - 2021
DA  - 2021/05/09
TI  - The Effects of Capital Adequacy, Credit Risk, and Liquidity Risk on Banks’ Financial Distress in Indonesia
BT  - Proceedings of the Ninth International Conference on Entrepreneurship and Business Management (ICEBM 2020)
PB  - Atlantis Press
SP  - 393
EP  - 399
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210507.059
DO  - 10.2991/aebmr.k.210507.059
ID  - Ekadjaja2021
ER  -