Excess capital and bank behavior : evidence from Indonesia

The Indonesian banking sector has been restructured since Asian financial crisis and restored to soundness. The capital adequacy ratio (CAR) returned to a sound level; however, the average excess capital has become too high, while credit disbursement has remained low. This paper investigates the determinants of excess capital among Indonesian banks and its effects on credit growth during the 2000s. The results indicate that the determinants of excess capital vary widely depending on bank type. Return on equity (ROE) affects excess capital negatively among domestic banks, and the effect of non-performing loans is mixed, differing for various bank types. Excess capital affects credit growth positively, except among foreign banks.

Early Pleistocene 40Ar/39Ar ages for Bapang Formation hominins, Central Jawa, Indonesia

The Sangiran dome is the primary stratigraphic window for the Plio-Pleistocene deposits of the Solo basin of Central Jawa. The dome has yielded nearly 80 Homo erectus fossils, around 50 of which have known findspots. With a hornblende 40Ar/39Ar plateau age of 1.66 ± 0.04 mega-annum (Ma) reportedly associated with two fossils [Swisher, C.C., III, Curtis, G. H., Jacob, T., Getty, A. G., Suprijo, A. & Widiasmoro (1994) Science 263, 1118–1121), the dome offers evidence that early Homo dispersed to East Asia during the earliest Pleistocene. Unfortunately, the hornblende pumice was sampled at Jokotingkir Hill, a central locality with complex lithostratigraphic deformation and dubious specimen provenance. To address the antiquity of Sangiran H. erectus more systematically, we investigate the sedimentary framework and hornblende 40Ar/39Ar age for volcanic deposits in the southeast quadrant of the dome. In this sector, Bapang (Kabuh) sediments have their largest exposure, least deformation, and most complete tephrostratigraphy. At five locations, we identify a sequence of sedimentary cycles in which H. erectus fossils are associated with epiclastic pumice. From sampled pumice, eight hornblende separates produced 40Ar/39Ar plateau ages ranging from 1.51 ± 0.08 Ma at the Bapang/Sangiran Formation contact, to 1.02 ± 0.06 Ma, at a point above the hominin-bearing sequence. The chronological sequence of 40Ar/39Ar ages follows stratigraphic order across the southeast quadrant. An intermediate level yielding four nearly complete crania has an age of about 1.25 Ma.