The effort to improve the resilience, competitiveness, and the efficiency of national banking industry are crucial to face regional and global dynamics. This can be conducted by organizing business activities adjusted to the bank`s capital adequacy. In addition, Indonesian banking sector also faces a bigger challenge in 2016, which is the enactment of ASEAN Economic Community (MEA) or the upcoming single market in ASEAN regional economic.
DEFINIT was appointed by the Financial Services Authority (OJK) to conduct a study on the core capital and readiness of banking in Indonesia in order to encounter the MEA. This study was conducted by collecting information about the recent condition about the efficiency and the capital of conventional banks in Indonesia by utilizing primary and secondary data.
For secondary data, this study made use of financial report data of Indonesian banks that is published by Financial Services Authority (OJK) and Bank Indonesia (BI). Meanwhile, the primary data in this study was collected through the survey addressed for respondents at director level or equivalent at the banks. Based on the survey data, the analysis to measure the ability of the addition of core capital, the readiness and the optimism of the banks in facing MEA enactment was then carried out.
This study also provides suggestions and policy recommendations in order to improve the competitiveness, efficiency, and resilience of the banking industry in Indonesia related to the implementation of MEA.