Market discipline by depositors : impact of deposit insurance on the Indonesian banking sector

This paper investigates market discipline by depositors in the Indonesian banking sector. Does depositor discipline fulfill its role in Indonesia? Does deposit insurance affect depositor behavior thereby imposing discipline on banks? These questions are empirically examined using panel data on Indonesian commercial banks from 1998 to 2009. In Indonesia deposit insurance was introduced in 2005. Depositor discipline is examined by two measures: change in the amount of deposits and interest rate. The empirical results show that depositors pay attention to bank soundness and riskiness and select banks based on the bank's condition with particular attention paid to equity ratio. It is found that depositors impose discipline on banks, but it varies according to regulatory and economic circumstances.

Post-1988 civil-military relations in Myanmar

This paper explores the development of civil–military relations in Myanmar since 1988. After the Tatmadaw (Myanmar Armed Forces) took over the state by means of a coup d’état in 1988, the top generals ruled the country without recourse to significant formal political institutions such as a constitution, elections and parliament. A unique authoritarian regime, where political power was predominantly under the military’s influence, lasted for more than 20 years in the country. It seemed to many observers that the military regime was highly durable and that its dictator, General Than Shwe, had no intention of altering the highly repressive character of the political system. However, a new leader, President Thein Sein, who came to power in March 2011, has decided to implement some political and economic reforms that could undermine the Tatmadaw’s dominant role in politics and the economy. This paper examines the background to this sudden political change in Myanmar, focusing on the relationship between its dictator, the military and the state. This paper’s main argument is that Than Shwe has carefully prepared the transition of 2011 as a generational change in the Tatmadaw and in state leadership. The argument is also made that the challenges created by Thein Sein can be understood as a result of his redefinition of national security and balancing of security-centralism with state-led developmentalism.

Asset composition of the Philippines' universal and commercial banks : monetary policy or self-discipline?

The central bank of the Philippines (Bangko Sentral ng Pilipinas, BSP) has improved its monetary policy measures since the 2000s. After rationalizing the country's banking sector since late-1990s, its monetary policy and the uniiversal/commercial banks' (UCBs) behavior in allocating their assets has changed since mid-2000s. Though further and more detailed studies are nesessary, based on the results of simple correlation analyses conducted in this paper suggest a possible mixture of the country's monetary policy and their own decision-making in asset allocations, instead of a "follow-through" attitude.