Paper Title :Deposit Insurance And The Banking Industry Stability In Asean: Evidence From A Dynamic Panel Investigation

Author :Suhalkusairi, Nurazurasanusi, Abdul Ghafar Ismail

Article Citation :Suhalkusairi ,Nurazurasanusi ,Abdul Ghafar Ismail , (2016 ) " Deposit Insurance And The Banking Industry Stability In Asean: Evidence From A Dynamic Panel Investigation " , International Journal of Management and Applied Science (IJMAS) , pp. 149-153, Volume-2,Issue-2

Abstract : Banking industry is the main of financial development due to the critical function to circulate money from a surplus to a deficit. The aim of this paper is to investigate the influence of deposit insurance policy on the stability of banking industry. The stability is measured by the ratio of retail deposit to total asset. Using data panel of 127 commercial banks for 2000 to 2013 in ASEAN consists of Indonesia, Malaysia, Singapore, Philippine, Thailand and Vietnam. Through the utilization of dynamic panel data investigation, the result states that the implementation of deposit insurance policy negatively influent on the ratio of retail deposit to total asset and the model support the influence of dynamic factors. It is very interesting finding due to it implies that the deposit insurance policy does not increase the confidence level of depositors and the finally will increase the total deposit. In addition, the result also states that an increase the ratio of loan to equity, sizes and lag of deposit to asset ratio of bank will increase the ratio of the retail deposit to total asset. But for the effect of net interest margin on the ratio of retail deposit to total asset is negative. This result is very importance for the regulators to evaluate the deposit insurance policy and anticipate of any negative circumstances which will be incurred. Keywords- Deposit Insurance, Banking Stability and GMM.

Type : Research paper

Published : Volume-2,Issue-2

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