CHAPTER 7 Assessing Corporate Sector Vulnerabilities
Author:
Marta Ruiz-Arranz
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Language:
English
Print Publication Date:
19 Jan 2012
Keywords:
BOOK; Indonesia; firm; capital structure; inflation in Indonesia; inflation risk premium; inflation expectation; Indonesian firm; Inflation; Corporate sector; Corporate governance; Reserve positions; Global; Asia and Pacific; AAA firm; company incorporation; company formation; firm's assets; Financial statements; Commercial banks; Loans

Abstract

This chapter discusses how the nonfinancial corporate sector in Indonesia was affected by the 2008–09 global financial crisis and recovery. It then uses contingent claims analysis to assess how vulnerable the corporate sector is going forward. Results suggest that losses from corporate defaults in Indonesia are expected to be manageable. Banks also appear able to absorb deteriorating credit conditions, but credit risks need careful management. Further improvements in corporate governance, credit resolution practices, and the judiciary could help reduce the risk perception investors have of Indonesian firms and their costs of doing business.

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Cover Indonesia
Indonesia
Sustaining Growth During Global Volatility
ISBN:
9781616352028
Publication Date:
19 Jan 2012
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781616352028.071
Pages:
141