The Effects of Risk Management, Funding Efficiency, and Regulatory Compliance on Financial Stability
Keywords:
Financial Stability, Funding Efficiency, Indonesian Banking, Regulatory Compliance, Risk Management.
Abstract
This study aims to analyze the effects of risk management, funding efficiency, and regulatory compliance on the financial stability of the banking sector in Indonesia during 2020-2024. This study addresses inconsistent findings in research regarding the determinants of financial stability and examines these factors simultaneously in the Indonesian banking context. A quantitative approach was employed using panel data regression. Secondary data were obtained from reports of banking companies listed on the Indonesia Stock Exchange during 2020-2024. Data analysis was conducted using EViews 12, including descriptive statistics, panel data model selection, classical assumption tests, t-test, F-test, and coefficient of determination. The results show that risk management has no significant effect on financial stability, while funding efficiency and regulatory compliance significantly affect financial stability. Simultaneously, all three independent variables significantly affect financial stability. These findings highlight the importance of funding efficiency and regulatory compliance in strengthening banking resilience and supporting financial stability.
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Rahadian, Z., Suherman, U., & Pranata, R. M. (2025). The effect of credit risk on the financial stability of rural credit banks in West Java: The mediating role of profitability. 6(3), 1374–1392.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal. https://doi.org/10.1002/smj.4250050207
Yakubu, & Bunyaminu. (2021). Regulatory capital requirement and bank stability. Journal of Sustainable Finance & Investment. https://doi.org/10.1080/20430795.2021.1961558
Oino. (2021). Bank solvency: The role of credit and liquidity risks, regulatory capital and economic stability. Banks and Bank Systems. https://doi.org/10.21511/bbs.16(4).2021.08
Otoritas Jasa Keuangan. (2024). Statistik perbankan Indonesia: Desember 2023. https://ojk.go.id/id/kanal/perbankan/data-dan-statistik/statistik-perbankan-indonesia/Pages/Statistik-Perbankan-Indonesia---Desember-2023.aspx
Putra, M. R. E. (2025). Independent: Journal of Economics E-ISSN 2798-5008. 5, 55–68.
Rahadian, Z., Suherman, U., & Pranata, R. M. (2025). The effect of credit risk on the financial stability of rural credit banks in West Java: The mediating role of profitability. 6(3), 1374–1392.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal. https://doi.org/10.1002/smj.4250050207
Yakubu, & Bunyaminu. (2021). Regulatory capital requirement and bank stability. Journal of Sustainable Finance & Investment. https://doi.org/10.1080/20430795.2021.1961558
Bahiyyah, K., Kurniawati, Y., & Romdoni, N. K. (2025). Disclosure of risk management processes at the best banks in Indonesia. 6(2), 736–750.
Barney. (1991). Firm resources and sustained competitive advantage.
Ditta, A. S. A., Ditasari, R. A., & Ardianingsih, A. (2024). Efficiency, credit risk and financial stability in national banking sector in Indonesia. JAK (Jurnal Akuntansi) Kajian Ilmiah Akuntansi, 11(1), 77–88.
Fatoni, A., & Sidiq, S. (2019). Analisis perbandingan stabilitas sistem perbankan syariah dan konvensional di Indonesia. Ekspansi: Jurnal Ekonomi, Keuangan, Perbankan dan Akuntansi, 11(2). https://doi.org/10.35313/ekspansi.v11i2.1350
Hayati, R., Rachmawati, E. N., & Suriyanti, L. H. (2026). Basel III compliance and bank resilience: An analysis of the effects of macroeconomic factors and profitability on the performance of Indonesian banks. 27(1). https://doi.org/10.18196/jai.v27i1.26636
Ischak, S. A., Maarif, M. S., Hermadi, I., & Asikin, Z. (2024). Efficiency and competitiveness of banking in Indonesia based on bank core capital group.
Kayani. (2023). Financial intermediation, economic growth, and business cycles.
Kayani, G. M., Akhtar, Y., Yiguo, C., Yousaf, T., Jawad, S., & Shahzad, H. (2021). The role of regulatory capital and ownership structure in bank liquidity creation: Evidence from emerging Asian economies. https://doi.org/10.1177/21582440211006051
Khandelwal, C., Kumar, S., Tripathi, V., & Madhavan, V. (2023). Joint impact of corporate governance and risk disclosures on firm value: Evidence from emerging markets. Research in International Business and Finance, 66, 102022. https://doi.org/10.1016/j.ribaf.2023.102022
Lee, L. (2023). Enhancing financial inclusion and regulatory challenges: A critical analysis of digital banks and alternative lenders through digital platforms, machine learning, and large language models integration.
Mateev. (2021). Capital regulation and market competition in the MENA region. Global Business Review. https://doi.org/10.1177/09721509211064442
Melo, F., Seal, K., & Salomao, D. (2024). Prinsip-prinsip inti Basel yang direvisi tahun 2024 untuk pengawasan perbankan yang efektif.
Mishkin, F. S. (2019). [Judul sumber tidak tersedia pada data referensi yang diberikan].
Oino. (2021). Bank solvency: The role of credit and liquidity risks, regulatory capital and economic stability. Banks and Bank Systems. https://doi.org/10.21511/bbs.16(4).2021.08
Otoritas Jasa Keuangan. (2024). Statistik perbankan Indonesia: Desember 2023. https://ojk.go.id/id/kanal/perbankan/data-dan-statistik/statistik-perbankan-indonesia/Pages/Statistik-Perbankan-Indonesia---Desember-2023.aspx
Putra, M. R. E. (2025). Independent: Journal of Economics E-ISSN 2798-5008. 5, 55–68.
Rahadian, Z., Suherman, U., & Pranata, R. M. (2025). The effect of credit risk on the financial stability of rural credit banks in West Java: The mediating role of profitability. 6(3), 1374–1392.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal. https://doi.org/10.1002/smj.4250050207
Yakubu, & Bunyaminu. (2021). Regulatory capital requirement and bank stability. Journal of Sustainable Finance & Investment. https://doi.org/10.1080/20430795.2021.1961558
Oino. (2021). Bank solvency: The role of credit and liquidity risks, regulatory capital and economic stability. Banks and Bank Systems. https://doi.org/10.21511/bbs.16(4).2021.08
Otoritas Jasa Keuangan. (2024). Statistik perbankan Indonesia: Desember 2023. https://ojk.go.id/id/kanal/perbankan/data-dan-statistik/statistik-perbankan-indonesia/Pages/Statistik-Perbankan-Indonesia---Desember-2023.aspx
Putra, M. R. E. (2025). Independent: Journal of Economics E-ISSN 2798-5008. 5, 55–68.
Rahadian, Z., Suherman, U., & Pranata, R. M. (2025). The effect of credit risk on the financial stability of rural credit banks in West Java: The mediating role of profitability. 6(3), 1374–1392.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal. https://doi.org/10.1002/smj.4250050207
Yakubu, & Bunyaminu. (2021). Regulatory capital requirement and bank stability. Journal of Sustainable Finance & Investment. https://doi.org/10.1080/20430795.2021.1961558
Published
2026-09-07
How to Cite
Lestari, S. P., Fauziah Bakhtiar, & Rusnawati. (2026). The Effects of Risk Management, Funding Efficiency, and Regulatory Compliance on Financial Stability. International Journal of Economics, Business and Innovation Research, 5(05), 3491-4505. https://doi.org/10.63922/ijebir.v5i05.6289
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