European Parliament Library

Assessing Corporate Vulnerabilities in Indonesia :, A Bottom-Up Default Analysis, Jorge Chan-Lau, Weimin Miao, Ken Miyajima, Jongsoon Shin

Abstract
Under adverse macroeconomic conditions, the potential realization of corporate sector vulnerabilities could pose major risks to the economy. This paper assesses corporate vulnerabilities in Indonesia by using a Bottom-Up Default Analysis (BuDA) approach, which allows projecting corporate probabilities of default (PDs) under different macroeconomic scenarios. In particular, a protracted recession and the ensuing currency depreciation could erode buffers on corporate balance sheets, pushing up the probabilities of default (PDs) in the corporate sector to the high levels observed during the Global Financial Crisis. While this is a low-probability scenario, the results suggest the need to closely monitor vulnerabilities and strengthen contingency plans
Language
eng
Literary form
non fiction
Physical description
1 online resource (23 pages), illustrations.
Specific material designation
remote
Form of item
online
ISBN
9781475596519

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