{
  "title": "Indonesia: Financial Sector Assessment Program-Technical Note on Stress Testing and Systemic Risk Analysis",
  "publication": "IMF Staff Country Reports, February 26, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2025/02/26/indonesia-financial-sector-assessment-program-technical-note-on-stress-testing-and-systemic-562721",
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  "summary": "This Technical Note explores Stress Testing and Systemic Risk Analysis for the Indonesia Financial Sector Assessment Program. The financial system is relatively small and dominated by banks with high capital and liquidity buffers.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- This Technical Note explores Stress Testing and Systemic Risk Analysis for the Indonesia Financial Sector Assessment Program.\n- The financial system is relatively small and dominated by banks with high capital and liquidity buffers.\n- Analysis is based on mid-2023 data.\n- The note covers the methodology and results of:\n  - the scenario-based solvency test,\n  - the single factor sensitivity analysis,\n  - the liquidity test, and\n  - interconnectedness analysis."
    },
    {
      "heading": "Methodology",
      "content": "- Top-down corporate and bank solvency stress tests were undertaken.\n- Bank liquidity stress tests were performed.\n- Interconnectedness analysis was conducted to assess interbank exposures and cross-border linkages.\n- Both scenario-based and single factor sensitivity approaches were used."
    },
    {
      "heading": "Key Findings — Solvency",
      "content": "- The results of the bank solvency stress test suggest that the banking sector is resilient to multiple macroeconomic shocks.\n- There are tail risks for small banks."
    },
    {
      "heading": "Key Findings — Liquidity",
      "content": "- The overall liquidity position of banks is sound.\n- Foreign exchange liquidity risks need to be closely monitored.\n- Recommendation: Liquidity Coverage Ratios should be made mandatory for all banks."
    },
    {
      "heading": "Key Findings — Interconnectedness",
      "content": "- Interconnectedness analysis points to limited interbank exposure.\n- Cross-border analysis is hindered by data availability."
    },
    {
      "heading": "Policy Recommendations and Actions",
      "content": "- Monitor foreign exchange liquidity risks closely.\n- Make Liquidity Coverage Ratios mandatory for all banks.\n\n---\n\n Content in this bundle\n\n- 1idnea2025003-print-pdf\n  - 1idnea2025003-print-pdf (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1idnea2025003-print-pdf (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "[Markdown version](/en/publications/cr/issues/2025/02/26/indonesia-financial-sector-assessment-program-technical-note-on-stress-testing-and-systemic-562721/index.md)",
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    "Published: February 26, 2025",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798229002332.002",
    "This Technical Note explores Stress Testing and Systemic Risk Analysis for the Indonesia Financial Sector Assessment Program.",
    "The financial system is relatively small and dominated by banks with high capital and liquidity buffers.",
    "Analysis is based on mid-2023 data.",
    "The note covers the methodology and results of:",
    "Top-down corporate and bank solvency stress tests were undertaken.",
    "Bank liquidity stress tests were performed.",
    "Interconnectedness analysis was conducted to assess interbank exposures and cross-border linkages.",
    "Both scenario-based and single factor sensitivity approaches were used.",
    "The results of the bank solvency stress test suggest that the banking sector is resilient to multiple macroeconomic shocks.",
    "There are tail risks for small banks.",
    "The overall liquidity position of banks is sound.",
    "Foreign exchange liquidity risks need to be closely monitored.",
    "Recommendation: Liquidity Coverage Ratios should be made mandatory for all banks.",
    "Interconnectedness analysis points to limited interbank exposure.",
    "Cross-border analysis is hindered by data availability.",
    "Monitor foreign exchange liquidity risks closely.",
    "Make Liquidity Coverage Ratios mandatory for all banks.",
    "**1idnea2025003-print-pdf**"
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