Interventions in Banks During Banking Crises: The Experience of Indonesia

Author/Editor:

Charles Enoch

Publication Date:

March 1, 2000

Electronic Access:

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Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Interventions in banks are often an integral element of a government’s program for addressing a systemic banking crisis. Interventions may be warranted because the banks are deeply insolvent or riddled with fraud; they may be requiring substantial liquidity support. In some circumstances closures may be more effective than open bank resolution. There were four major sets of bank closures in Indonesia between November 1997 and March 1999. The initial closures were subject to criticism, but the more recent ones were viewed more positively. This paper looks at these experiences, and draws conclusions about closing banks in a systemic crisis.

Series:

Policy Discussion Paper No. 2000/002

Subject:

English

Publication Date:

March 1, 2000

ISBN/ISSN:

9781451974461/1564-5193

Stock No:

PPIEA0022000

Pages:

31

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