Effect Of Credit Growth On Systemic Risk In Banking Stability in Indonesia (Case Study Of 25 Banks Go Public)
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| Issue | Vol 9 No 1 (2026): Talenta Conference Series: Local Wisdom, Social, and Arts (LWSA) | |
| Section | Articles | |
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Copyright (c) 2026 Talenta Conference Series: Local Wisdom, Social, and Arts (LWSA)  This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. |
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| Galley | ||
| DOI: | https://doi.org/10.32734/lwsa.v9i1.2737 | |
| Keywords: | Systemic Risk Household Credit Corporate Credit Tradeable Credit Non-Tradeable Credit | |
| Published | 2026-03-09 |
Abstract
This study investigates the effect of sectoral credit allocation comprising household credit, corporate credit, tradeable credit, and non-tradeable credit on systemic risk in Indonesia’s publicly listed banking sector from 2015 to 2023. Using the Marginal Expected Shortfall (MES) as a measure of systemic risk and employing the Generalized Method of Moments for Dynamic Panel Data (GMM-DPD), the analysis controls for endogeneity and dynamic relationships among variables. The results indicate that household credit, corporate credit, and non-tradeable credit significantly reduce systemic risk, suggesting a stabilizing role in the financial system, whereas tradeable credit significantly increases systemic risk, likely due to its greater exposure to external shocks and market volatility. These findings highlight the importance of sector-specific credit distribution in mitigating systemic risk and offer relevant insights for policymakers and financial regulators aiming to enhance financial stability through prudent credit allocation strategies
