Abstract
The ASEAN Economic Community (AEC) declared in 2003 in Bali has begun in 2015. The main agenda of the AEC is a single market and production base that includes freight traffic, goods, services, investment, labor and capital. The financial sector is a sector whose implementation is allowed to be leased until 2020 before being fully implemented. In the banking sub-sector is agreed a scheme known as the ASEAN Banking Integration Framework (ABIF) in which ASEAN banks that meet the criteria as Qualified ASEAN BANK (QAB) can participate in the ABIF scheme. The QAB criteria are: (i) well managed (ii) have sufficient capital (iii) obtain recommendation from the authorities, (iv) pass the Basel provisions and (v) be considered important banks in the country of origin To see the readiness of Indonesia’s banks to participate in the ABIF mechanism, the authors conducted a study to answer the question of whether Indonesia’s banks are ready to participate in the ABIF mechanism. The methodologies used by the authors are to determine some criteria against the condition of Indonesia’s banks such as financial ratios and bank health, which then the authors compare to the conditions of banks in other neighboring ASEAN countries. The result is that Indonesia’s banks in particular the QAB category are ready to participate in the ABIF mechanism whose implementation will begin in full by 2020.
Highlights
The ASEAN Economic Community (AEC) was first proclaimed in Bali on 17 October 2003 (Bali Concorde II)
The results will be used as a tool to measure the readiness of Indonesia banks in facing ASEAN banking integration through the ASEAN Banking Integration Framework (ABIF) scheme as a follow-up to the AEC agreement on the financial sector
The growth of Indonesia’s Banks Asset, Equity and Liabilities: Indonesia’s banks can increase their equity by selling shares in the Indonesia Stock Exchange (BEI) or go public as Indonesia's capital market is a potential source of funding for banks as long as they can convince the public that the shares of these banks are profitable shares to buy and trade in BEI
Summary
The ASEAN Economic Community (AEC) was first proclaimed in Bali on 17 October 2003 (Bali Concorde II). One of the AEC’s agenda is the implementation of ASEAN Banking Integration Framework (ABIF) through Qualified ASEAN Banks (QABs). One of the AEC’s agenda is the implementation of ASEAN Banking Integration Framework (ABIF) through Qualified ASEAN Banks (QABs)1 This means that by the end of 2015 bank liberalization has begun to be implemented by ASEAN countries already in place. The question is, are Indonesia’s banks ready to face competition with the banks from other ASEAN countries, such as banks from Singapore, Malaysia and Thailand, when the AEC is fully implemented? This study will focus on the readiness of Indonesia’s banks to follow the ABIF scheme by comparing some relevant variables between Indonesia’s banks and several other ASEAN member countries, especially Singapore, Malaysia, Thailand and the Philippines (ASEAN five). The results will be used as a tool to measure the readiness of Indonesia banks in facing ASEAN banking integration through the ABIF scheme as a follow-up to the AEC agreement on the financial sector
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
