Prudential Principle of Through Bail-In Scheme on Problem Systemic Bank Handling

DOI

10.2991/icssis-18.2019.65How to use a DOI?

Keywords

Prudential Principles, Bail-in, Bail-out, Banks, Problema Systemic Banks, Financial Services Authority, Bank Indonesia, and Financial System Stability.

Abstract

The bail-in scheme is a conversion of obligations from BSB to become a capital for handling the solvency problems of BSB. Capital owners will be prudential and struggle to defend their banks when they facing problems of solvency and financial liquidity that have the potential to cause a systemic crisis. Conditions of capital difficulties faced by banks that do not fulfill the provision of minimum capital by the Financial Services Authority (OJK) can lead to the Financial System Crisis (KSK). Learning from past experiences, the bail-in scheme become alternative to BSB handling. Bail-in schemes confiscated many state finances, did not save troubled banks, banks were not prudent, banks could not rise again, but only losing funds bail-out, and bank management enjoyed the fund bail-out. The bail-in scheme can increase bank prudence in managing business activities, preventing fraud and potential violations. This is the essence of prudential regulation in the banking industry. The prudential principle is a preventative measure that is internal to the bank concerned, requiring the bank to always be careful, consistent with the laws and regulations, professionals, and good faith.

Copyright

© 2019, 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  - Bisdan Sigalingging
AU  - Bismar Nasution
AU  - Sunarmi
AU  - Zulkarnain Sitompul
PY  - 2019/05
DA  - 2019/05
TI  - Prudential Principle of Through Bail-In Scheme on Problem Systemic Bank Handling
BT  - Proceedings of the 1st International Conference on Social Sciences and Interdisciplinary Studies (ICSSIS 2018)
PB  - Atlantis Press
SP  - 317
EP  - 319
SN  - 2352-5398
UR  - https://doi.org/10.2991/icssis-18.2019.65
DO  - 10.2991/icssis-18.2019.65
ID  - Sigalingging2019/05
ER  -