: 10.56472/25835238/IRJEMS-V4I11P122
Ciplis Gema Qori’ah, Adhitya Wardhono, Misbahol Yaqin, M. Abd. Nasir. "Market Power and Financial Stability: An Empirical Study of the Banking Industry in Selected ASEAN Countries" International Research Journal of Economics and Management Studies, Vol. 4, No. 11, pp. 162-169, 2025. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V4I11P122
The banking industry has experienced rapid development in the last decade. This has implications for banking competition, which will affect financial stability. Therefore, this study tested the impact of market power in the digital era on financial stability in selected ASEAN countries. Empirically, this study uses panel data from 2000 to 2014 with sections from 4 countries, namely Indonesia, Malaysia, Thailand, and the Philippines. The method used in this research is Panel Vector Autoregressive (PVAR). The Impulse Response Function results from the PVAR analysis indicate that high market power tends to reduce financial stability in the Selected ASEAN Countries. These results explain that the banking industry, which has a level of market power, tends to increase interest rates so that the risk of bad loans by banks will be even higher. These conditions imply that it is necessary to strengthen the monetary authorities' tight supervision to maintain a competitive climate in the banking industry and minimize risks that impact financial stability.
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Banking Competition; Financial Stability; Market Power; ASEAN.