The Impact of The Financial Services Authority Regulation on Banking Credit Quality in Improving Indonesia’s Economy During COVID-19 Pandemic: The Critical Thinking Analysis

Abstract

The impact of Covid-19 has impacted the asset quality and profitability of the banks and disrupted economic growth and business conditions globally. In one form of the decline in the economic sector, many members of society, including bank debtors, have lost their livelihoods. The enhancement of non-performing loans experienced by National Banks has resulted in banks losing their ability to generate optimal profit from bank operations so that the bank was always in a healthy, liquid, solvent, and profitable state. The Financial Services Authority issued several Financial Services Authority Regulations during 2020 to make sure that the bank can control bad credit of debtors affected by the Covid-19 outbreak. This study aimed to identify and analyze the impact of Financial Service Authority regulations on the quality of banking credit in improving the Indonesian economy amid the Covid-19 pandemic. This study used a qualitative approach with a critical thinking analysis method. The results of this study concluded that the impact of Financial Services Authority regulations on the quality of banking credit in improving the Indonesian economy amid the Covid-19 pandemic has been shown by the stability of the financial system, which was still well maintained the efforts of the Financial Services Authority to support the national economic recovery policy by Government of Indonesia.