THE ANALYSIS OF RISK PROFILE AND FINANCIAL VULNERABILITY OF HOUSEHOLDS IN INDONESIA

THE ANALYSIS OF RISK PROFILE AND FINANCIAL VULNERABILITY OF HOUSEHOLDS IN INDONESIA

Arlyana Abubakar¹, Rieska Indah Astuti², Rini Oktapiani³

1 Senior economic researcher, Department of Macroprudential Policy, Bank Indonesia;

(corresponding author arlyana@bi.go.id).

2 Economic researcher, Department of Macroprudential Policy, Bank Indonesia;

rieska_ia@bi.go.id

3 Research Fellow, Department of Macroprudential Policy, Bank Indonesia; rini.

oktapiani@gmail.com

ž‘˜›œȱ ˜ž•ȱ•’”Žȱ˜ȱ‘Š—”ȱ•Ÿ’—ȱ›ŠŠ–ŠǰȱŠžę”ȱ’Š¢ŠǰȱŠ—ȱŠ£–Š—ȱ‘œŠ—ž’—ȱ for their contribution to this paper. Views expressed in this paper are solely from authors and do not necessarily represent the views of Bank Indonesia. We also thank reviewers and editor of this journal for their critical evaluation and suggestion on

›Žę—’—ȱ‘’œȱ™Š™Ž›ǯ

‘’œȱ™Š™Ž›ȱ’Ž—’ęŽœȱ‘ŽȱŸž•—Ž›Š‹’•’¢ȱ˜ȱ‘˜žœŽ‘˜•ȱ’—ȱ—˜—Žœ’Šȱžœ’—ȱ‹˜‘ȱŠ•Š—ŒŽȱ Sheet and Financial Margin Approaches with coping strategy analysis in response to ꗊ—Œ’Š•ȱ™›Žœœž›Žǯȱ‘Žȱ›Žœž•ȱŒ˜—Œ•žŽȱ‘Šȱ‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱ’œȱœ˜•ŸŽ—ȱŠ—ȱœ˜ž—ȱ  ’‘ȱ‘’‘ȱ’—Ž›Œ˜——ŽŒ’Ÿ’¢ȱ ’‘ȱ‘Žȱ—˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—ǰȱ™Š›’Œž•Š›•¢ȱ ’‘ȱ‹Š—”œǯȱ

‘Žȱ ‘ŽŠ–Š™ȱ Œ˜™’—ȱ œ›ŠŽ’Žœȱ Š›Žȱ ’—ȱ ‘Žȱ –˜Ž›ŠŽȱ £˜—Žǯȱ ˜ ŽŸŽ›ǰȱ ’ȱ Œž–ž•Š’ŸŽ•¢ȱ

Ž—œȱ˜ȱŒ‘Š—Žȱ˜ȱŠȱ‘’‘ȱŠ—ȱŽ¡›Ž–Žȱ£˜—Žȱ ‘’Œ‘ȱ™˜Ž—’Š••¢ȱŒ›ŽŠŽœȱ’–‹Š•Š—ŒŽœȱ’—ȱ‘Žȱ ꗊ—Œ’Š•ȱœ¢œŽ–ȱ’—ȱ—˜—Žœ’Šǯ

Ž¢ ˜›œDZȱŠ•Š—ŒŽȱœ‘ŽŽȱŠ—Š•¢œ’œǰȱꗊ—Œ’Š•ȱ–Š›’—ǰȱŒ˜™’—ȱœ›ŠŽ¢

ȱ•Šœœ’ęŒŠ’˜—DZȱŗŚǰȱśŘǰȱ Řŗ

ABSTRACT

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 444

I. INTRODUCTION

The real sector, including households and corporations, plays a vital role in the economy. The household sector has assets and exposure that are relatively large in

‘Žȱꗊ—Œ’Š•ȱ’—žœ›¢ǰȱ’—’ŒŠ’—ȱ‘Šȱ‘Žȱ™Ž›˜›–Š—ŒŽȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱŒŠ—ȱ

ŠěŽŒȱ‘Žȱ˜ŸŽ›Š••ȱꗊ—Œ’Š•ȱœ¢œŽ–ǯȱ‘Žȱ’—Œ›ŽŠœŽȱŽ‹ȱ˜›ȱ‘˜žœŽ‘˜•ȱ˜‹•’Š’˜—œǰȱ amid a sustained slowdown in the economy, prompted the need for monitoring of

‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱ˜ȱ™›ŽŸŽ—ȱ™˜Ž—’Š•ȱ’–‹Š•Š—ŒŽœȱ’—ȱ‘Žȱꗊ—Œ’Š•ȱœ¢œŽ–ȱ›˜–ȱ households.

‘Žȱ’–‹Š•Š—ŒŽȱ›’œ”œȱŽ–Š—Š’—ȱ›˜–ȱ‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱŒŠ—ȱ‹Žȱ›Š—œ–’ĴŽȱ

˜ȱ ‘Žȱ ꗊ—Œ’Š•ȱ œ¢œŽ–ȱ ‘›˜ž‘ȱ œŽŸŽ›Š•ȱ Œ‘Š——Ž•œȱ ǻǰȱ ŘŖŖśǼǯȱ ˜žœŽ‘˜•œȱ Š›Žȱ

Ž¡™˜œŽȱ ˜ȱ ›’œ”ȱ ’—ȱ ‘Ž’›ȱ ŒŠ™Š‹’•’’Žœȱ Šœȱ ˜ —Ž›œȱ ˜ȱ ꗊ—Œ’Š•ȱ ŠœœŽœȱ ’—ȱ ‘Žȱ ˜›–ȱ ˜ȱ third-party funds, securities, equity assets and insurance, and pension funds.

Besides, households are also exposed to risks in their role as fund borrowers from

‘Žȱꗊ—Œ’Š•ȱœŽŒ˜›ǰȱ™Š›’Œž•Š›•¢ȱ‹Š—”œǯȱ‘Žȱ’–‹Š•Š—ŒŽȱ˜ŒŒž›œȱ ‘Ž—ȱ‘Žȱ‘˜žœŽ‘˜•ȱ

ŒŠ——˜ȱ™Š¢ȱ˜ěȱ‘Žȱ•’Š‹’•’’Žœȱ˜ȱ‘Žȱ‹Š—”ǰȱœ˜ȱ‘Žȱ‹Š—”ȱœžěŽ›œȱ•˜œœŽœǯȱ—ȱ‘Žȱ˜‘Ž›ȱ

‘Š—ǰȱ ‘˜žœŽ‘˜•œȱ Ž¡™Ž›’Ž—Œ’—ȱ ꗊ—Œ’Š•ȱ ’ĜŒž•’Žœȱ  ’••ȱ Š•œ˜ȱ ›ŽžŒŽȱ œ™Ž—’—ȱ on consumption, thereby reducing the demand for goods and services that may subsequently have an impact on the economy. As a result, corporations experience a decrease in revenues that could lead to the decline in the ability of corporations in terms of repayment capacity to banks.

‘ŽȱȱŽ¡™Ž›’Ž—ŒŽȱ˜ȱœž‹Ȭ™›’–Žȱ–˜›ŠŽȱ‘Šȱ•Žȱ˜ȱ‘Žȱ•˜‹Š•ȱŒ›’œ’œȱ’—ȱŘŖŖŞȱ

œ‘˜ Žȱ‘ŠȱŒ›Ž’ȱ›’œ”œȱ›˜–ȱ‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱŒ˜ž•ȱ‘ŠŸŽȱŠȱœ’—’ęŒŠ—ȱ’–™ŠŒȱ on the economy as a whole. A high interconnection between the household sector

Š—ȱ ‘Žȱ ꗊ—Œ’Š•ȱ œŽŒ˜›ȱ Œ˜ž•ȱ ™˜Ž—’Š••¢ȱ ’—Œ›ŽŠœŽȱ œ¢œŽ–’Œȱ ›’œ”ȱ ’—ȱ ‘Žȱ ŽŸŽ—ȱ ˜ȱ

Šȱ œ‘˜Œ”ȱ ’—ȱ ‘Žȱ ‘˜žœŽ‘˜•ȱ œŽŒ˜›ǯȱ ‘Ž›Ž˜›Žǰȱ Šȱ ‹›˜ŠŽ›ȱ ‘˜žœŽ‘˜•ȱ ›’œ”ȱ ™›˜ę•Žȱ ’œȱ

—ŽŽŽȱ˜ȱ–’’ŠŽȱ‘Žȱ›’œ”œȱœŽ––’—ȱ›˜–ȱ‘Žȱ‘˜žœŽ‘˜•Ȃœȱꗊ—Œ’Š•ȱ’–‹Š•Š—ŒŽǯ

˜žœŽ‘˜•ȱ ‹Š•Š—ŒŽœȱ Š›Žȱ •’—”Žȱ ˜ȱ ˜‘Ž›ȱ œŽŒ˜›œȱ ‹Š•Š—ŒŽȱ œ‘ŽŽœȱ œžŒ‘ȱ Šœȱ

Œ˜›™˜›Š’˜—œǰȱ ‘Žȱ ™ž‹•’Œȱ œŽŒ˜›ȱ Š—ȱ ‘Žȱ ꗊ—Œ’Š•ȱ œŽŒ˜›ȱ ›˜–ȱ ‹˜‘ȱ ŠœœŽœǰȱ Š—ȱ

•’Š‹’•’’Žœǯȱ˜žœŽ‘˜•ȱŽ¡™˜œž›Žȱ˜ȱŠ••ȱœŽŒ˜›œȱ˜ȱ‘ŽȱŽŒ˜—˜–¢ȱŒŠ—ȱ‹ŽȱŠ—Š•¢£Žȱžœ’—ȱ the Balance Sheet Approach (BSA) method as the IMF has done it. BSA is used for

œž›ŸŽ’••Š—ŒŽȱ˜ȱꗊ—Œ’Š•ȱœ¢œŽ–ȱœŠ‹’•’¢ȱ‹¢ȱŠ—Š•¢£’—ȱ™˜œ’’˜—ȱŠŠǰȱ‹˜‘ȱŠœœŽœȱ

Š—ȱ•’Š‹’•’’Žœȱ˜ȱŽŠŒ‘ȱœŽŒ˜›ȱ˜ȱ–ŽŠœž›Žȱ›’œ”ȱ’—ȱŠȱŒ˜ž—›¢ȂœȱŽŒ˜—˜–¢ȱǻŠ’–ȱǭȱŽŸ¢ȱ ǻŘŖŖŝǼȱŠ—ȱ••Ž—ȱŽȱŠ•ǯȱǻŘŖŖŘǼǼǯ

—ȱŘŖŗŚǰȱŠ—”ȱ—˜—Žœ’Šȱ’—ȱŒ˜••Š‹˜›Š’˜—ȱ ’‘ȱ˜‘Ž›ȱ›Ž•ŠŽȱ’—œ’ž’˜—œȱ‹ŽŠ—ȱ to prepare National and Regional balance sheets starting with the preparation of Financial Account (FA). Through the use of National Balance Sheet (NBS) data, the economy can be viewed as an integrated system of sectoral balance sheets, comprising government sectors, central banks, households, banks, corporations,

—˜—Ȭ‹Š—”’—ȱꗊ—Œ’Š•ȱ’—œ’ž’˜—œǰȱŠ—ȱŽ¡Ž›—Š•ȱŠ›ŽŠœǯȱ‘ŽȱŠŸŠ’•Š‹’•’¢ȱ˜ȱ’—Ž›ŠŽȱ NBS data can illustrate inter-sectoral linkages and economic conditions so that it

ŒŠ—ȱ‹ŽȱžœŽȱ˜ȱž›‘Ž›ȱŠ—Š•¢£Žȱ‘Žȱ’—Ž›ȬœŽŒ˜›ȱꗊ—Œ’Š•ȱ›’œ”œǰȱꗊ—Œ’Š•ȱ’–‹Š•Š—ŒŽœȱ between institutions, domestic, and overseas. It is expected to obtain information

›Ž•ŠŽȱ˜ȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱ›’œ”ȱ™›˜ę•ŽȱŠœȱ Ž••ȱŠœȱ•’—”ŠŽœȱ‹Ž ŽŽ—ȱ‘Žȱ‘˜žœŽ‘˜•ȱ sector and other economic sectors through a more in-depth analysis of NBS data.

Also, the study features a vulnerability assessment of households primarily

Ž›’ŸŽȱ ›˜–ȱ Œ›Ž’ȱ ›’œ”ȱ žœ’—ȱ ‘Žȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ ’—’ŒŠ˜›ǯȱ œ’—ȱ ‘Žȱ Š—”ȱ

—˜—Žœ’Šȱ˜žœŽ‘˜•ȱž›ŸŽ¢ȱǻȱǼȱŠŠȱ’—ȱŘŖŗśǰȱ‘Žȱꗊ—Œ’Š•ȱ–Š›’—ȱŸŠ•žŽœȱȱȱ

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š ŚŚś

for each sample in the survey can be used to indicate whether the household is

Ž¡™Ž›’Ž—Œ’—ȱ’œ›Žœœȱ˜—ȱ’œȱꗊ—Œ’Š•ȱŒ˜—’’˜—ȱ˜›ȱ—˜ǯ

‘’œȱ™Š™Ž›ȱŠ’–œȱ˜ȱ’Ž—’¢ȱ‘ŽȱŒ‘Š›ŠŒŽ›’œ’ŒœȱŠ—ȱ›’œ”ȱ™›˜ę•Žȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•ȱ

œŽŒ˜›ȱ’—ȱ—˜—Žœ’Šǯȱ•œ˜ǰȱ’ȱŽŸŽ•˜™œȱŠ—ȱ’—’ŒŠ˜›ȱ˜ȱ‘˜žœŽ‘˜•ȱꗊ—Œ’Š•ȱ’–‹Š•Š—ŒŽȱ through the Balance Sheet Approach (BSA) and Financial Margin Approach (FMA). The present paper further maps household heatmap coping strategies in

ŠŒ’—ȱ˜ȱꗊ—Œ’Š•ȱ™›Žœœž›Žœǰȱ›ŽŽ››’—ȱ˜ȱ‘ŽȱŒŠ•Œž•Š’˜—ȱ˜ȱ‘Žȱ‹Š•Š—ŒŽȱ’—’ŒŠ˜›ǯ This paper has several limitations, namely the limited data on individual

‘˜žœŽ‘˜•œǯȱ ŽŒ˜—ǰȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ Š—Š•¢œ’œȱ ’œȱ •’–’Žȱ ˜ȱ Šȱ ›Ž’˜—Š•ȱ Œ˜ŸŽ›ŠŽȱ ǻŗŘȱ™›˜Ÿ’—ŒŽœǼȱŠ—ȱ‘Žȱ—ž–‹Ž›ȱ˜ȱœŠ–™•ŽœȱžœŽȱ’—ȱ‘ŽȱŘŖŗśȱȱœ˜ȱŠœȱ—˜ȱ˜ȱ‹Žȱ aggregated nationally. Besides, the analysis did not involve inferential modeling and testing.

The next section of this paper reviews the theories and literature that are strictly related to this topic. The third section describes the research methodology, while Section 4 presents the results of calculating and mapping the level of household

Žšž’•’‹›’ž–ȱ’—ȱ—˜—Žœ’Šǯȱ‘ŽȱęĞ‘ȱœŽŒ’˜—ȱ™›ŽœŽ—œȱ‘ŽȱŒ˜—Œ•žœ’˜—œȱŠ—ȱŒ•˜œŽœȱ‘’œȱ paper.

II. THEORY

Řǯŗǯȱ’—Š—Œ’Š•ȱŠ›’—

’—Š—Œ’Š•ȱ–Š›’—ȱ’œȱŠȱ•’šž’ȱŠœœŽȱ‘Ž•ȱ‹¢ȱ‘˜žœŽ‘˜•œȱŠĞŽ›ȱŽžŒ’—ȱ‘ŽȱŒ˜œȱ˜ȱ debt including the cost of interest and principal debt as well as total household expenditures. This indicator represents household resilience to changes in macroeconomic conditions such as an increase in interest rates or a decrease in

’—Œ˜–Žǯȱ ž›‘Ž›–˜›Žǰȱ ‘Žȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ –Š¢ȱ Š•œ˜ȱ ™›˜Ÿ’Žȱ ’—˜›–Š’˜—ȱ Š‹˜žȱ

‘Žȱ›’œ”ȱ˜ȱŠȱ‘˜žœŽ‘˜•ȂœȱŽŠž•ȱ˜—ȱ•˜Š—œȱ›˜–ȱꗊ—Œ’Š•ȱ’—œ’ž’˜—œȱœžŒ‘ȱŠœȱ•Š›Žȱ

‹Š—”œȱ‘ŠȱŒŠ—ȱŠěŽŒȱ‘ŽȱœŠ‹’•’¢ȱ˜ȱ‘Žȱꗊ—Œ’Š•ȱœ¢œŽ–ȱǻŠ—ŽǰȱŘŖŖŝǼǯ

˜žœŽ‘˜•œȱ ’‘ȱ—ŽŠ’ŸŽȱꗊ—Œ’Š•ȱ–Š›’—œȱŒŠ—ȱ‹ŽȱŒ˜—œ’Ž›ŽȱŠœȱŸž•—Ž›Š‹•Žȱ households. The share of vulnerable households can be a crucial indicator in monitoring household resilience to various shocks such as employment shock as well as changes in interest rates, asset prices, exchange rates, and repayment

ŸŽ‘’Œ•Žȱ¢’Ž•œȱǻ•‹ŠŒŽŽȱŠ—ȱŽœœ•Ž›ǰȱŘŖŗŖǼǯ

˜ȱŠ—Š•¢£Žȱ‘ŽȱŸž•—Ž›Š‹’•’¢ȱ˜ȱ‘˜žœŽ‘˜•œǰȱ‘Žȱꗊ—Œ’Š•ȱ–Š›’—ȱŒŠ—ȱŠ•œ˜ȱ‹Žȱ

žœŽȱŠœȱŠȱꗊ—Œ’Š•ȱ’œ›Žœœȱ’—’ŒŠ˜›ȱ ‘Ž›Žȱ‘˜žœŽ‘˜•œȱŠ›ŽȱŠœœž–Žȱ˜ȱ‹Žȱ’œ›ŽœœŽȱ  ‘Ž—ȱ‘Ž¢ȱ‘ŠŸŽȱ—ŽŠ’ŸŽȱꗊ—Œ’Š•ȱ–Š›’—œǯȱ‘Žȱꗊ—Œ’Š•ȱ–Š›’—ȱ›Ž™›ŽœŽ—œȱ‘Žȱ

’쎛Ž—ŒŽȱ‹Ž ŽŽ—ȱ‘˜žœŽ‘˜•ȱ’—Œ˜–ŽȱŠĞŽ›ȱŠ¡ȱŠ—ȱ–Š’—ȱŽ¡™Ž—’ž›Žȱ’—Œ•ž’—ȱ food, energy, transportation, health and rental, and debt repayment expenses ǻ•ŠŸŠŒǰȱŠ”ž‹’”ǰȱǭȱ Š•žœŒŠ”ǰȱŘŖŗŚǼǯ

›ŠŠ–Šȱ ǭȱ ’Š¢Šȱ ǻŘŖŗśǼȱ Ž¡™•Š’—œȱ ‘Šȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ ŒŠ—ȱ ‹Žȱ žœŽȱ Šœȱ a proximate measure of household credit risk that can describe the ability of

‘˜žœŽ‘˜•œȱ˜ȱ™Š¢ȱ‹˜‘ȱœ‘˜›ȬŽ›–ȱŠ—ȱ•˜—ȬŽ›–ȱŽ‹œǯȱ˜žœŽ‘˜•œȱ ’‘ȱ—ŽŠ’ŸŽȱ ꗊ—Œ’Š•ȱ–Š›’—œȱŠ›ŽȱŒ˜—œ’Ž›Žȱ˜ȱ‹Žȱ‘˜žœŽ‘˜•œȱ‘ŠȱŠ›Žȱ’—ȱꗊ—Œ’Š•ȱ›˜ž‹•ŽȱŠ—ȱ

Š›ŽȱŒ‘Š›ŠŒŽ›’£Žȱ‹¢ȱ‘Žȱ’—Š‹’•’¢ȱ˜ȱ–ŽŽȱ‹Šœ’Œȱ—ŽŽœȱŠ—ȱ›Ž™Š¢ȱ‘ŽȱŽ‹ȱœ˜ȱ‘Šȱ households tend to have high default potentiality of repayment.

‘ŽȱŸž•—Ž›Š‹’•’¢ȱŠ—Š•¢œ’œȱ˜ȱ‘˜žœŽ‘˜•œȱ’—ȱ˜› Š¢ȱžœ’—ȱ‘Žȱꗊ—Œ’Š•ȱ–Š›’—ȱ

’—’ŒŠ˜›ȱŒ˜—žŒŽȱ‹¢ȱŠ—ŽȱǻŘŖŖŝǼȱ‘›˜ž‘ȱ‘Žȱ—Œ˜–ŽȱŠ—ȱ›˜™Ž›¢ȱŠ’œ’Œœȱ

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 446

˜›ȱ ˜žœŽ‘˜•ȱ ŗşŞŝȬŘŖŖřȱ ŠŠǰȱ œ‘˜ Žȱ ‘Šȱ ŗřƖȱ ˜ȱ ‘˜žœŽ‘˜•œȱ ’—ȱ ˜› Š¢ȱ Š›Žȱ

Ÿž•—Ž›Š‹•Žȱ ‘˜žœŽ‘˜•œȱ ˜›ȱ ‘ŠŸŽȱ ꗊ—Œ’Š•ȱ ŸŠ•žŽȱ  ’‘ȱ —ŽŠ’ŸŽȱ –Š›’—ȱ ’—ȱ ŘŖŖřǰȱ  ‘Ž›Žȱ‘Žȱ˜ —Ž›œ‘’™ȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•ȱŽ‹ȱ›ŽŠŒ‘ŽȱŗŝƖȱ˜ȱ˜Š•ȱ‘˜žœŽ‘˜•ȱŽ‹ǯ

¢ȱ ’—Œ˜–Žȱ ›˜ž™ǰȱ Šœȱ –Š—¢ȱ Šœȱ ŘŖƖȱ ˜ȱ ‘Žȱ ‘’‘Žœȱ ’—Œ˜–Žȱ ‘˜žœŽ‘˜•œȱ ˜ —ȱ 1/3 of the total household debt, where the debt held by vulnerable households is

›Ž•Š’ŸŽ•¢ȱœ–Š••ȱǻŝƖǼǯȱ—ȱ‘Žȱ•˜ Žœȱ’—Œ˜–Žȱ‘˜žœŽ‘˜•œȱ›˜ž™ǰȱ–˜›Žȱ‘Š—ȱśŖƖȱ˜ȱ‘Žȱ

Ž‹ȱ’œȱ˜ —Žȱ‹¢ȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œǯȱ ›˜ž™œȱ˜ȱ‘˜žœŽ‘˜•œȱ ’‘ȱ™›˜žŒ’ŸŽȬ

ŠŽȱ ‘˜žœŽ‘˜•ȱ ‘ŽŠœȱ ǻŘŚȬřśȱ ¢ŽŠ›œǼȱ ‘ŠŸŽȱ Š•–˜œȱ řŖƖȱ ˜ȱ ˜Š•ȱ ‘˜žœŽ‘˜•ȱ Ž‹ȱ  ‘Ž›ŽȱŚŖƖȱ˜ȱ‘ŽȱŽ‹ȱ’œȱ˜ —Žȱ‹¢ȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œǯ

œ’—ȱȂœȱ˜žœŽ‘˜•ȱž›ŸŽ¢ȱ˜—ȱ˜žœ’—ȱŽŠ•‘ȱŘŖŖŞȱǻǰȱŘŖŖŞǼȱŠ—ȱ ꗊ—Œ’Š•ȱ–Š›’—ȱŒŠ•Œž•Š’˜—ȱ–Ž‘˜ǰȱ•‹ŠŒŽŽȱǭȱŽœœ•Ž›ȱǻŘŖŗŖǼȱ˜ž—ȱ‘Šȱ‘Žȱœ‘Š›Žȱ

˜ȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œȱ’—ȱžœ›’Šȱ›Š—Žȱ›˜–ȱşǯŘƖȱ˜ȱŗśǯŜƖǯȱ¢ȱ’—Œ˜–Žȱ›˜ž™ǰȱ the highest income households have a relatively small percentage of susceptible

‘˜žœŽ‘˜•œȱ ‘Šȱ ŸŠ›’Žœȱ Š›˜ž—ȱ ŗƖǯȱ ‘’•Žȱ ‘Žȱ •˜ Žœȱ ’—Œ˜–Žȱ ‘˜žœŽ‘˜•œȱ ‘ŠŸŽȱ Šȱ

œ‘Š›Žȱ˜ȱ‘˜žœŽ‘˜•œȱ‘Šȱ›ŽŠŒ‘ŽȱśŜǯŝƖȱ˜ȱŝŖǯśƖǯȱ—ȱŽ—Ž›Š•ǰȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œȱ in Austria tend to have low incomes, massive debts, and are headed by women.

’•œ˜—ǰȱ ˜‘—œ˜—ǰȱ ǭȱ ŽŠȱ ǻŘŖŗśǼȱ Œ˜—žŒŽȱ Šȱ ‘˜žœŽ‘˜•ȱ Ÿž•—Ž›Š‹’•’¢ȱ

Š—Š•¢œ’œȱžœ’—ȱŠȱꗊ—Œ’Š•ȱ–Š›’—ȱŠ™™›˜ŠŒ‘ȱžœ’—ȱ‘Žȱ˜žœŽ‘˜•œǰȱ—Œ˜–ŽǰȱŠ‹˜›ȱ

¢—Š–’Œœȱ’—ȱžœ›Š•’ŠȱǻǼȱœž›ŸŽ¢ȱŠŠǯȱ‘Žȱ›Žœž•œȱŽ¡™•Š’—Žȱ‘Šȱ‘Žȱœ‘Š›Žȱ

˜ȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œȱ’—ȱžœ›Š•’Šȱ›ŽŠŒ‘ŽȱŗŘƖȱ’—ȱŘŖŖŘǰȱŗŖƖȱ’—ȱŘŖŖŜǰȱŠ—ȱŞƖȱ

’—ȱ ŘŖŗŖǯȱ ŠœŽȱ ˜—ȱ Ž–˜›Š™‘’Œȱ Œ‘Š›ŠŒŽ›’œ’ŒœǰȱŸž•—Ž›Š‹•Žȱ ‘˜žœŽ‘˜•œȱŠ›Žȱ ‘˜œŽȱ contracting household with relatively low income.

—˜‘Ž›ȱ œž¢ǰȱ Œ˜—žŒŽȱ ‹¢ȱ ˜‘Š—œœ˜—ȱ ǭȱ Ž›œœ˜—ȱ ǻŘŖŖŜǼȱ ’—ȱ  Ž’œ‘ȱ

‘˜žœŽ‘˜•œȱžœ’—ȱȱž›ŸŽ¢ȱŠŠǰȱ˜ž—ȱ‘Šȱ‘Žȱœ‘Š›Žȱ˜ȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œȱ

’—ȱ ŽŽ—ȱŠŒŒ˜ž—Žȱ˜›ȱŜǯřƖȱ˜ȱŠ••ȱ‘˜žœŽ‘˜•œȱ ’‘ȱŽ‹œȱ’—ȱ ‘’Œ‘ȱ‘Žȱ‘˜žœŽ‘˜•ȱ

‘˜•œȱśǰŜƖȱ˜ȱ‘Žȱ˜Š•ȱ‘˜žœŽ‘˜•ȱŽ‹ȱ’—ȱ ŽŽ—ǯ

—ȱ ‘Žȱ —˜—Žœ’Š—ȱ ŒŠœŽǰȱ 쎗’ȱ ǻŘŖŗśǼȱ žœŽȱ Šȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ Š™™›˜ŠŒ‘ȱ ˜ȱ

Š—Š•¢£Žȱ‘ŽȱŸž•—Ž›Š‹’•’¢ȱ˜ȱ—˜—Žœ’Š—ȱ‘˜žœŽ‘˜•œȱ‹¢ȱž’•’£’—ȱ‘ŽȱŘŖŗŘȱŠ’˜—Š•ȱ Socio-Economic Survey (SUSENAS) data and found that the average share of

Ÿž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Šȱ’œȱśǯřşƖǯȱŠœŽȱ˜—ȱ’—Œ˜–ŽȱŽŒ’•Žœǰȱ‘Žȱ–˜œȱ

œ’—’ęŒŠ—ȱ œ‘Š›Žȱ ˜ȱ Ÿž•—Ž›Š‹•Žȱ ‘˜žœŽ‘˜•œȱ ’œȱ ˜ž—ȱ ’—ȱ ŽŒ’•ŽȬŗȱ ǻ•˜ Žœȱ ’—Œ˜–Žȱ

Œ•ŠœœǼǰȱ ›ŽŠŒ‘’—ȱ ŚŗƖǯȱ ŽŠ— ‘’•Žǰȱ ‘Žȱ ™Ž›ŒŽ—ŠŽȱ ˜ȱ Ÿž•—Ž›Š‹•Žȱ ‘˜žœŽ‘˜•œȱ ’—ȱ

ŽŒ’•ŽȬŗŖȱǻ‘’‘Žœȱ’—Œ˜–ŽȱŒ•ŠœœǼȱ Šœȱ›ŽŒ˜›Žȱ›Ž•Š’ŸŽ•¢ȱœ–Š••ǰȱ’ǯŽǯǰȱ•Žœœȱ‘Š—ȱŗƖǯȱ The share of households based on income deciles tends to decrease as income increases.

›ŠŠ–Šȱ ǭȱ ’Š¢Šȱ ǻŘŖŖŝǼȱ Š•œ˜ȱ Š—Š•¢£Žȱ ‘˜žœŽ‘˜•ȱ Ÿž•—Ž›Š‹’•’¢ȱ ‘›˜ž‘ȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ ’—’ŒŠ˜›ȱ ‹¢ȱ žœ’—ȱ ‘Žȱ ŘŖŖŝȱ —˜—Žœ’Š—ȱ Š–’•¢ȱ ’Žȱ ž›ŸŽ¢ȱ ǻǼȱ ŠŠǯȱ —ȱ ‘’œȱ ›ŽœŽŠ›Œ‘ǰȱ ‘Ž›Žȱ Š›Žȱ  ˜ȱ Š™™›˜ŠŒ‘Žœǰȱ ’›ŽŒȱ Š—ȱ ’—’›ŽŒǯȱ —ȱ

‘Žȱ ’––Ž’ŠŽȱ Š™™›˜ŠŒ‘ǰȱ ‘Žȱ ŸŠ•žŽȱ ˜ȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ ’œȱ ŒŠ•Œž•ŠŽȱ ‹ŠœŽȱ ˜—ȱ

‘Žȱ’쎛Ž—ŒŽȱ‹Ž ŽŽ—ȱ™Ž›ȱŒŠ™’ŠȱŽ¡™Ž—’ž›Žȱ ‘’Œ‘ȱ’œȱ‘Žȱ™›˜¡¢ȱ˜ȱ’—Œ˜–ŽȱŠ—ȱ

œ™Ž—’—ȱ ’‘ȱŠȱ–˜—‘•¢ȱ™Š¢–Ž—ǯȱŽŠ— ‘’•Žǰȱ‘ŽȱŸŠ•žŽȱ˜ȱꗊ—Œ’Š•ȱ–Š›’—ȱ’—ȱ‘Žȱ

’—’›ŽŒȱŠ™™›˜ŠŒ‘ȱ’œȱ˜‹Š’—Žȱ›˜–ȱ‘Žȱ’쎛Ž—ŒŽȱ‹Ž ŽŽ—ȱ‘˜žœŽ‘˜•ȱŽ¡™Ž—’ž›Žȱ which is the proxy of income with predicted essential consumption and monthly payment.

The result of the analysis, using the direct approach, showed that in total

‘Ž›ŽȱŠ›ŽȱŗŜƖȱ˜ȱ—˜—Žœ’Š—ȱ‘˜žœŽ‘˜•œȱ‘ŠȱŠ›ŽȱŸž•—Ž›Š‹•Žȱ˜ȱŽŠž•ȱ ’‘ȱŽ‹ȱ

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š ŚŚŝ

˜ —Ž›œ‘’™ȱ˜ȱŚŞƖǯȱȱ‘Žȱ˜Š•ȱ‘˜žœŽ‘˜•œȱ ’‘ȱŽ‹ȱ˜ȱ‹Š—”œǰȱŘŜƖȱ Ž›ŽȱŸž•—Ž›Š‹•Žȱ

‘˜žœŽ‘˜•œȱ ’‘ȱ˜ —Ž›œ‘’™ȱ˜ȱŽ‹ȱ‘Šȱ›ŽŠŒ‘ŽœȱśŘƖǯ

The analysis, generated by the indirect approach, tends to be overestimated due to the double counting of the reduction in household expenditure as a proxy of income with basic consumption accounted for by the value of household

Ž¡™Ž—’ž›Žǯȱ—ȱ˜Š•ǰȱ‘Žȱœ‘Š›Žȱ˜ȱŸž•—Ž›Š‹•Žȱ‘˜žœŽ‘˜•œȱ›ŽŠŒ‘ŽȱŚşƖȱ ’‘ȱŽ‹ȱ

˜ —Ž›œ‘’™ȱ˜ȱŚśƖǯȱ‘’œȱ›Žœž•ȱ’œȱ—˜ȱ–žŒ‘ȱ’쎛Ž—ȱ˜›ȱ‘˜žœŽ‘˜•œȱ ‘˜ȱ‘ŠŸŽȱŽ‹ȱ

˜—•¢ȱ˜ȱ‹Š—”œȱ ‘Ž›ŽȱŠœȱ–Š—¢ȱŠœȱŚşƖȱ˜ȱ‘ŽœŽȱ‘˜žœŽ‘˜•œȱŠ›ŽȱŸž•—Ž›Š‹•Žȱ˜ȱŽŠž•ȱ

Š—ȱ‘ŠŸŽȱŠȱŽ‹ȱ˜ȱŚŜƖǯ

By demographic characteristics, the results of the direct approach indicated that households with fragile share and high debt holdings are male-headed households at productive age with homes. While in the indirect method, household groups that have a share of vulnerable households with high debt holdings are households with houses as debt guarantees.

ŘǯŘǯȱ˜žœŽ‘˜•ȱ˜™’—ȱŽŒ‘Š—’œ–

There are three choices of coping strategies that can be done by the household which includes risk prevention, risk mitigation, and risk coping strategies (Tesliuc

Š—ȱŠ”’œǰȱŘŖŖŚǼǯȱȱ›’œ”ȱ™›ŽŸŽ—’˜—ȱœ›ŠŽ¢ȱ’œȱŠȱœ›ŠŽ¢ȱžœŽȱ‹Ž˜›ŽȱŠȱ›’œ”¢ȱŽŸŽ—ȱ occurs and is carried out with the purpose of reducing the likelihood occurrence

˜ȱ‘ŽȱŽŸŽ—ȱ‘ŠȱŒŠ—ȱŠěŽŒȱ‘Žȱ Ž•Š›Žȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•ǯȱ—•’”Žȱ‘Žȱ›’œ”ȱ™›ŽŸŽ—’˜—ȱ strategy, risk mitigation strategies are carried out by households to reduce the impact of an event that has been predicted to occur. Meanwhile, risk coping strategies are a household strategy when risky events have occurred. The general form of the strategy may be the withdrawal of savings, borrowing money, relying on assistance from private or government agencies, and so on.

These risk management strategies can be informally carried out between households (informal, based arrangements), market-based arrangements that are

›’œ”ȱ‘Š—•’—ȱ ’‘ȱ‘Žȱ‘Ž•™ȱ˜ȱꗊ—Œ’Š•ȱ’—œ’ž’˜—œǰȱŠ—ȱ™ž‹•’ŒȱŠ››Š—Ž–Ž—œȱ‘Šȱ are handling household risks with the assistance of the government.

Of the three risk management strategies mentioned above, the risk coping strategy is the most important strategy for households because it can measure the magnitude of household resilience to certain events that can cause household ꗊ—Œ’Š•ȱ ’–‹Š•Š—ŒŽȱ ‘Šȱ ’ȱ —˜ȱ ‘Š—•Žȱ ™›˜™Ž›•¢ȱ ŒŠ—ȱ ‘ŠŸŽȱ Š—ȱ ’–™ŠŒȱ ˜—ȱ ‘Žȱ

˜ŒŒž››Ž—ŒŽȱ˜ȱꗊ—Œ’Š•ȱ™›Žœœž›Žȱǻ’œ›ŽœœǼȱǻžœŠ›’ȱŽȱŠ•ǯȱǻŘŖŖşǼȱŠ—ȱȱǻŗşşŞǼǼǯ

ž›‘Ž›–˜›Žǰȱ—Ž•ȱǭȱŠ›’—ȱǻŘŖŖŗǼȱŠ—ȱ‘›Š–’ȱǭȱ˜ž–™‘˜—ŽȱǻŘŖŖŘǼȱ›ŽŸŽŠ•Žȱ that in general, coping strategies are carried out primarily when households are

Ž¡™Ž›’Ž—Œ’—ȱŽŒ˜—˜–’Œȱ’ĜŒž•’Žœȱ ‘’Œ‘ȱ–Š¢ȱ’—Œ•žŽȱœ›ŠŽ’Žœȱ˜ȱꗍȱœ˜•ž’˜—œȱ to problems, strategies for dealing with stress and strategy to develop defense mechanisms. The form of coping strategies undertaken by households tends to

ŸŠ›¢ǰȱ Š–˜—ȱ ˜‘Ž›œǰȱ ŒŠ—ȱ ‹Žȱ Ž’‘Ž›ȱ •’–’Š’˜—ȱ ˜ȱ ‘Žȱ Ž¡™Ž—’ž›Žȱ ˜›ȱ ŽĴ’—ȱ ‘Žȱ additional income just to meet the basic needs and keep the level of welfare of life (not reduce).

•œ˜ǰȱȬȱŽ ˜›”ȱ˜˜›’—Š’—ȱŽŠ–ȱǻŘŖŗŗǼȱŽ¡™•Š’—Žȱ‘Šȱ‘˜žœŽ‘˜•ȱ

›’œ”ȱ Œ˜™’—ȱ œ›ŠŽ’Žœȱ Š›Žȱ Œ˜—žŒŽȱ  ’‘ȱ ‘Žȱ Š’–ȱ ˜ȱ –’—’–’£’—ȱ ‘Žȱ ’–™ŠŒȱ ˜ȱ pressure on the level of well-being. In general, these strategies are complicated

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 ŚŚŞ

in that they depend on exogenous and endogenous factors such as household characteristics, experience, local economics, infrastructure, and networks.

ŠœŽȱ ˜—ȱ ‘Žȱ Œ•Šœœ’ęŒŠ’˜—ȱ ˜ȱ ‘Žȱ Ž—Ž›ŠŽȱ ŽěŽŒœȱ ǻœŽŸŽ›’¢Ǽǰȱ ›’œ”ȱ Œ˜™’—ȱ strategies can be divided into three as follows.

1. Non-Erosive Coping includes borrowing strategies; reducing food consumption;

substituting food for cheaper; reducing unnecessary spending; and selling non- productive assets.

2. Erosive Coping includes a high-interest borrowing strategy; sell productive assets such as land, animals, farmland, other productive equipment; borrowing wages for the next period payment; and employing minors.

3. Failed Coping is a situation where households have a high dependence on others to meet their needs, migrate, steal, beg, and so forth.

‘Žȱ˜›•ȱŠ—”ȱǻŘŖŗŗǼȱŽ¡™•Š’—Žȱ‘Šȱ‘Ž›ŽȱŠ›Žȱœ‘˜Œ”œȱ›˜–ȱ‘Žȱ•Š‹˜›ȱ–Š›”Žȱ such as termination of employment, credit markets such as rising lending rates, product markets such as rising food prices and reducing government subsidies to society (in general) will be responded by the public through the increasing of revenues either via withdrawal of savings or doing additional work, and so on.

Another response that can also be done by households regarding expenditure is to reduce spending including expenditures on valuables, food, education, health, insurance, and so forth.

‘ŽȱŠ’•ž›Žȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•ȱ˜ȱ›Žœ™˜—ȱ˜ȱ‘Žȱœ‘˜Œ”ȱ ’••ȱŠěŽŒȱ‘ŽȱŽŒ•’—Žȱ’—ȱ

‘Žȱ•ŽŸŽ•ȱ˜ȱ‘˜žœŽ‘˜•ȱ Ž•Š›Žȱ›Ž™›ŽœŽ—Žȱ‹¢ȱ‘ŽȱŽŒ›ŽŠœŽȱ’—ȱꗊ—Œ’Š•ȱŠœœŽœȱ’—ȱ

‘Žȱ˜›–ȱ˜ȱœŠŸ’—ǰȱŽŒ›ŽŠœ’—ȱ—˜—Ȭꗊ—Œ’Š•ȱŠœœŽœǰȱŽŒ›ŽŠœ’—ȱ‘ŽȱŠŒŒž–ž•Š’˜—ȱ of human capital such as employing children under the age of work, and so forth.

More explicitly, the interaction between household shock sources and household responses and their impact on household welfare can be seen in the following diagram.

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š ŚŚş

In more depth, coping strategies taken by households in response to particular pressures or events can also determine the degree of vulnerability they encounter.

‘Žȱ ˜˜ȱ ŽŒž›’¢ȱ ǭȱ Š›•¢ȱ Š›—’—ȱ ž•—Ž›Š‹’•’¢ȱ ŠœœŽœœ–Ž—ȱ –Š—žŠ•ȱ ǻǰȱ ŗşşşǼȱŽœŒ›’‹Žœȱ‘ŠȱŒ˜™’—ȱœ›ŠŽ’Žœȱž—Ž›Š”Ž—ȱ‹¢ȱ‘˜žœŽ‘˜•œȱŒŠ—ȱŠ••ȱ–Š’—•¢ȱ into two categories: adaptation and divestment strategies for divestment of both

•’šž’ȱ ŠœœŽœȱ Š—ȱ ™›˜žŒ’ŸŽȱ ŠœœŽœǯȱ ˜‘ȱ œ›ŠŽ’Žœȱ ŒŠ—ȱ ›ŽĚŽŒȱ ‘Žȱ Ž¡Ž—ȱ ˜ȱ ‘Žȱ vulnerability faced by households. The level of vulnerability of households is divided into three, namely moderate, high, and extreme vulnerability level.

˜žœŽ‘˜•œȱ ‘’Œ‘ȱ‘ŠŸŽȱŒ˜™’—ȱŠŠ™Š’˜—ȱœ›ŠŽ’Žœȱ’—ȱ›Žœ™˜—œŽȱ˜ȱŠ—ȱŽŸŽ—ȱ occurring, generally have relatively moderate vulnerability levels. Meanwhile, households that choose to divest on liquid assets tend to have high levels of vulnerability or even extreme especially for households who divest on productive assets.

The link between coping strategies and household vulnerability levels can be seen more comprehensively on heatmap coping strategies adapted from the Food

ŽŒž›’¢ȱǭȱŠ›•¢ȱŠ›—’—ȱž•—Ž›Š‹’•’¢ȱȱǻŗşşşǼȱŠœœŽœœ–Ž—ȱ–Š—žŠ•ȱŠ—ȱ‘Šœȱ been used internationally to identify household vulnerability levels by looking at  ‘Šȱœ›ŠŽ’ŽœȱŠ›ŽȱžœŽȱ’—ȱŠŒ’—ȱ˜ȱꗊ—Œ’Š•ȱ™›Žœœž›Žœǯ

Chart 1. Interactions between Shock Sources and Coping Strategies as well

–™ŠŒœȱ˜—ȱ˜žœŽ‘˜•ȱŽ•Š›Ž

Source: World Bank (2011) in the PEP-CBMS Network Coordinating Team (2011)

Shock Sources 1. Labor market 2. Credit market 3. Product market 4. Government services

Examples:

Impact of Welfare 1. Impact on poverty 2. Impact on long-term accumulation of human capital 3. Impact on savings and assets Coping Strategies

Improve Disposable Income Labor supply

Withdrawal of saving or borrowing Informal safety nets

Formal safety nets Reduce Expenses Durable goods Food

Education/health Insurance etc

SHOCK Job Loss

SHOCK Increase Food Price

SHOCK Crop Failure

RECOVERY Got New Job

RECOVERY Increase in Per Capita

Food Consumption RECOVERY Bumper Harvest &

Loan Payment COPING STRATEGIES

Look For Job

COPING STRATEGIES Reduce Number of Meals

COPING STRATEGIES Borrowed Money

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 ŚśŖ

ǯȱ řǯŗǯȱ˜Ž•ȱ›Š–Ž ˜›”

The framework in this research uses two approaches, namely macro (aggregate) using Balance Sheet Approach method and micro by using Financial Margin Approach. The macro analysis using BSA provides information on the household

œŽŒ˜›ȱ ›’œ”ȱ ™›˜ę•Žȱ ˜‹Š’—Žȱ Ž’‘Ž›ȱ ‘›˜ž‘ȱ ’—’Ÿ’žŠ•ȱ œŽŒ˜›ȱ ›’œ”ȱ Š—Š•¢œ’œȱ ˜ȱ ‘Žȱ sector or an interconnectedness risk analysis of households with other institutional sectors. Individual household risk analysis is obtained through a balance sheet risk indicator, while the risk analysis of household linkages with other sectors is obtained through BSA matrix.

The FMA is done by using two approaches, namely income approach and expenditure approach. Both methods result in the share and demographic

Œ‘Š›ŠŒŽ›’œ’Œœȱ ˜ȱ ‘˜žœŽ‘˜•œȱ ‘Šȱ ‘ŠŸŽȱ —ŽŠ’ŸŽȱ ꗊ—Œ’Š•ȱ –Š›’—œȱ Š—ȱ ž›‘Ž›ȱ

Žę—Žȱ Šœȱ Ÿž•—Ž›Š‹•Žȱ ‘˜žœŽ‘˜•œǯȱ ‘Žȱ ›Žœž•œȱ ˜ȱ œžŒ‘ȱ Š—Š•¢œ’œȱ ŒŠ—ȱ ‹Žȱ ’—™žȱ ’—ȱ

ŽŒ’œ’˜—ȱ –Š”’—ȱ ™›’–Š›’•¢ȱ ˜›ȱ ‘Žȱ ™›˜Ÿ’œ’˜—ȱ ˜ȱ ‘˜žœŽ‘˜•ȱ Œ›Ž’ȱ ‹¢ȱ ꗊ—Œ’Š•ȱ institutions.

In addition to both methods, the household vulnerability can also be assessed

‹ŠœŽȱ˜—ȱŒ˜™’—ȱœ›ŠŽ’ŽœȱŠ”Ž—ȱ’—ȱŠŒ’—ȱꗊ—Œ’Š•ȱ™›Žœœž›Žœǯȱ—˜›–Š’˜—ȱ›Ž•ŠŽȱ to household coping strategies was obtained through survey results based on

‘›ŽŽȱ™›’–Š›¢ȱŠ—œ Ž›œȱœŽ•ŽŒŽȱ‹¢ȱ›Žœ™˜—Ž—œȱ’—ȱŠŒ’—ȱꗊ—Œ’Š•ȱ’ĜŒž•’Žœǯȱ‘Žȱ behavior of household coping strategies can lead to vulnerability as actions taken

ŒŠ—ȱ ’›ŽŒ•¢ȱ ’–™ŠŒȱ ‘Žȱ ꗊ—Œ’Š•ȱ œŽŒ˜›ǰȱ œžŒ‘ȱ Šœȱ  ’‘›Š ’—ȱ Ž™˜œ’œȱ ’—ȱ ‹Š—”œȱ

Š—ȱœ˜ȱ˜—ǰȱ˜ȱŠěŽŒȱ‘Žȱ˜ŸŽ›Š••ȱ‹Š•Š—ŒŽȱ˜ȱ‘Žȱꗊ—Œ’Š•ȱœ¢œŽ–ǯȱ•œ˜ǰȱ’—˜›–Š’˜—ȱ on household demographic characteristics obtained through FMA can also be an input in coping strategies given that the strategies adopted by vulnerable households potentially lead to higher vulnerability.

Sumber : PEP - CBMS Network Coordinating Team (2011) Reversibility Low HighLow

High

Time Household Vulnerability

Household Strategies Adaptation

Diet change, Increase in labor, Reduction of HH Costs Reduction in size/frequency of meals

Reduction in quality of meals Skipped days

without eating Ate wild foods

Dangerous activities Longer seasonal migration

More casual labour Child removed

Sold HH possessions Consumed money

˜•ȱ˜ěȱœ–Š••ȱŠ—’–Š•œ ˜•ȱ˜ěȱŠ›’Œž•ž›Žȱ’–™•Ž–Ž—œ

˜•ȱ˜ěȦŒ˜—œž–Žȱ—Ž¡

season’s seed grains

˜•ȱ˜ěȦŒ˜—œž–Ž

large animals

˜•ȱ˜ěȱ™›˜žŒ’ŸŽ

tools/equipment Borrowed money from money lender to buy food Sold or pledged land or house Destitution Utilized wild resources

Borrow money for food

intended for small business from school

One or more family members moved to seek work

Liquid assets Productive assets Divestment

Moderate High

Extreme

Severity of Impact on HH

‘Š›ȱŘǯȱŽŠ–Š™ȱ˜™’—ȱ›ŠŽ’Žœ

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š Śśŗ

Š•Š—ŒŽȱ‘ŽŽȱ™™›˜ŠŒ‘ȱǻǼ

Analysis of household vulnerability in aggregate includes analysis of individual

‘˜žœŽ‘˜•ȱ›’œ”ȱ™›˜ę•Žȱ˜ȱœŽŒ˜›œȱŠœȱ Ž••ȱŠœȱ›’œ”ȱŠ—Š•¢œ’œȱ˜ȱ‘˜žœŽ‘˜•ȱ•’—”ŠŽœȱ ’‘ȱ

˜‘Ž›ȱ ’—œ’ž’˜—Š•ȱ œŽŒ˜›œȱ œžŒ‘ȱ Šœȱ Œ˜›™˜›Š’˜—œǰȱ ‹Š—”œǰȱ Š—ȱ ǯȱ—ȱ Š™™›˜ŠŒ‘ȱ

‘ŠȱŒŠ—ȱ‹ŽȱžœŽȱ˜ȱŠ—Š•¢£Žȱ‘ŽȱŸž•—Ž›Š‹’•’¢ȱ˜ȱ‘˜žœŽ‘˜•œȱ’œȱǯ

ȱ ’œȱ Š—ȱ Š™™›˜ŠŒ‘ȱ ‘Šȱ žœŽœȱ œŽŒ˜›Š•ȱ ‹Š•Š—ŒŽȱ œ‘ŽŽȱ ŠŠȱ ˜ȱ Š—Š•¢£Žȱ ‘Žȱ

’—Ž›Œ˜——ŽŒ’˜—ȱ‹Ž ŽŽ—ȱŽŒ˜—˜–’ŒȱœŽŒ˜›œȱŠ—ȱŠ—Š•¢£Žȱ‘Žȱ™˜œ’’˜—ȱ˜ȱŠœœŽœȱŠ—ȱ

•’Š‹’•’’Žœȱ˜ȱŠȱœŽŒ˜›ȱŠ—ȱ’œȱŒ‘Š—ŽœȱŒŠžœŽȱ‹¢ȱœ‘˜Œ”œȱ’—ȱŒŽ›Š’—ȱœŽŒ˜›œȱŠ—ȱŠěŽŒȱ

˜‘Ž›ȱœŽŒ˜›œȱ‘›˜ž‘ȱ‘Žȱ‹Š•Š—ŒŽȱœ‘ŽŽȱŒ‘Š——Ž•ȱǻǰȱŘŖŗśǼǯ

The sectoral balance sheet data used in this study is national and regional

ŠŠȱ ˜ȱ ȱ Š—”ȱ —˜—Žœ’Šȱ ’—ȱ ŘŖŗśǯȱ ‘Žȱ ŠŠȱ ’œȱ ‘Ž—ȱ žœŽȱ ’—ȱ ŒŠ•Œž•Š’—ȱ ‘Žȱ

‹Š•Š—ŒŽȱ œ‘ŽŽȱ ›’œ”ȱ ’—’ŒŠ˜›ȱ ˜ȱ ’Ž—’¢ȱ ‘˜žœŽ‘˜•ȱ ›’œ”ȱ ™›˜ę•Žǯȱ ’œ”ȱ ’—’ŒŠ˜›œǰȱ used concerning data availability, are liquidity risk indicators such as the ratio of saving to expenditure and solvency risk such as the ratio of liabilities to assets and

•’Š‹’•’’Žœȱ˜ȱ ǯ

Also, interconnection analysis between the household sector and other sectors uses the whom-to-whom matrix or BSA matrix in the FABS data. The type of ȱ –Š›’¡ȱ žœŽȱ ’œȱ ‘Žȱ ȱ –Š›’¡ȱ ˜›ȱ ‘Žȱ —Žȱ ꗊ—Œ’Š•ȱ ™˜œ’’˜—ȱ ’—’ŒŠ˜›ȱ ‘Šȱ

ŒŠ—ȱ ŽœŒ›’‹Žȱ ‘Žȱ ‘˜žœŽ‘˜•Ȃœȱ ꗊ—Œ’Š•ȱ ™˜œ’’˜—ȱ ˜ Š›œȱ ˜‘Ž›ȱ œŽŒ˜›œȱ Š—ȱ ’œȱ Š—ȱ indicator of the vulnerability of the economic sector. In general, the value of the net ꗊ—Œ’Š•ȱ™˜œ’’˜—ȱ’œȱŽ›’ŸŽȱ›˜–ȱ‘Žȱ’쎛Ž—ŒŽȱ’—ȱ˜Š•ȱꗊ—Œ’Š•ȱŠœœŽœȱœž‹›ŠŒŽȱ

‘Žȱ˜Š•ȱ•’Š‹’•’’Žœǯȱ‘Žȱ—ŽŠ’ŸŽȱŸŠ•žŽȱ˜ȱ‘Žȱ—Žȱꗊ—Œ’Š•ȱ™˜œ’’˜—ȱ’–™•’Žœȱ‘Šȱ‘Žȱ

œŽŒ˜›ȱ’œȱŠŒ’—ȱꗊ—Œ’Š•ȱ™›˜‹•Ž–œȱ ‘Ž›Žȱ‘Žȱ˜Š•ȱꗊ—Œ’Š•ȱŠœœŽœȱŠ›Žȱ’—œžĜŒ’Ž—ȱ

˜ȱ–ŽŽȱŠ••ȱ˜ȱ‘Žȱ˜‹•’Š’˜—œȱǻǰȱŘŖŗśǼǯ

Analysis of Household Vulnerability

Macro Balance Sheet

Approach

Balance Sheet Risk Indicator

BSA Matrix

Household

’œ”ȱ›˜ę•Ž

Micro Financial Margin

Approach

Income Approach

Expenditure Approach

Characteristic of Household Vulnerability

Coping Strategies

Chart 3. Domestic Vulnerability Framework Analysis

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 ŚśŘ

’—Š—Œ’Š•ȱŠ›’—ȱ™™›˜ŠŒ‘ȱǻǼ

‘Žȱ ’Ž—’ęŒŠ’˜—ȱ ˜ȱ ‘˜žœŽ‘˜•ȱ Ÿž•—Ž›Š‹’•’¢ȱ ’œȱ Š•œ˜ȱ ’—’Ÿ’žŠ••¢ȱ ˜—Žȱ ˜ȱ complement the results of the aggregate analysis individually using FMA. FMA is an approach used to calculate household margins derived from residual income

ŠĞŽ›ȱ ŽžŒ’—ȱ Ž¡™Ž—’ž›Žǰȱ ‹˜‘ȱ ‹Šœ’Œȱ Ž¡™Ž—’ž›Žœǰȱ Š—ȱ Ž¡™Ž—’ž›Žœȱ ˜ȱ ™Š¢ȱ

™›’—Œ’™Š•ȱ ’—œŠ••–Ž—œȱ ˜ȱ Ž‹ȱ Š—ȱ ’—Ž›Žœȱ Žę—Žȱ Šœȱ ꗊ—Œ’Š•ȱ –Š›’—ȱ ǻ’•œ˜—ǰȱ

˜‘—œ˜—ǰȱǭȱŽŠǰȱŘŖŗśǼǯ

Financial margins measure the ability of households to cover debts, both short-

Ž›–ȱŠ—ȱ•˜—ȬŽ›–ǯȱ˜žœŽ‘˜•œȱ ’‘ȱ—ŽŠ’ŸŽȱꗊ—Œ’Š•ȱ–Š›’—œȱŠ›ŽȱŽę—ŽȱŠœȱ vulnerable households. Such vulnerability, if not addressed properly, may result

’—ȱ’ĜŒž•’Žœȱ’—ȱ–ŽŽ’—ȱ‹Šœ’Œȱ—ŽŽœȱŠ—ȱ›Ž™Š¢ȱŽ‹ǰȱ’—Œ›ŽŠœ’—ȱ‘Žȱ™˜œœ’‹’•’¢ȱ˜ȱ

ŽŠž•ȱ˜ȱ‘ŽȱŒ˜ž—Ž›™Š›¢ȱǻ›ŠŠ–Šȱǭȱ’Š¢ŠǰȱŘŖŗśǼǯ

This study focuses on households that have the debt to banks and have negative ꗊ—Œ’Š•ȱ –Š›’—ȱ ŸŠ•žŽǯȱ žŒ‘ȱ ‘˜žœŽ‘˜•œȱ –Š¢ȱ Ž—Ž›ŠŽȱ ꗊ—Œ’Š•ȱ ’–‹Š•Š—ŒŽœȱ through exposure to other sectors, particularly banks.

‘ŽȱŠŠȱžœŽȱ˜ȱŒŠ•Œž•ŠŽȱ‘Žȱꗊ—Œ’Š•ȱ–Š›’—ȱ˜ȱŽŠŒ‘ȱ‘˜žœŽ‘˜•ȱ’œȱ‘ŽȱŠŠȱ

˜ȱȱŘŖŗśǯȱ‘ŽȱŸŠ•žŽȱ˜ȱꗊ—Œ’Š•ȱ–Š›’—ȱ’œȱ˜‹Š’—Žȱ‘›˜ž‘ȱ ˜ȱŠ™™›˜ŠŒ‘Žœǰȱ namely income approach and expenditure approach. In the income approach,

‘Žȱꗊ—Œ’Š•ȱ–Š›’—ȱŸŠ•žŽȱ˜ȱ‘˜žœŽ‘˜•œȱ’œȱ˜‹Š’—Žȱ›˜–ȱ‘Žȱ’쎛Ž—ŒŽȱ‹Ž ŽŽ—ȱ income with expenditure for basic consumption and debt repayments. This

Š™™›˜ŠŒ‘ȱ ’œȱ ŠŠ™Žȱ ›˜–ȱ ‘Žȱ•‹ŠŒŽŽȱ ǭȱ Žœœ•Ž›ȱ ǻŘŖŗŖǼȱ œž¢ȱ ž’•’£’—ȱ ŽȂœȱ

˜žœŽ‘˜•ȱ ž›ŸŽ¢ȱ ˜—ȱ ˜žœ’—ȱ ŽŠ•‘ȱ ŘŖŖŞȱ ǻǰȱ ŘŖŖŞǼȱ ŠŠȱ ˜ȱ Š—Š•¢£Žȱ ‘Žȱ

Ÿž•—Ž›Š‹’•’¢ȱ˜ȱ‘˜žœŽ‘˜•œȱ’—ȱžœ›’ŠǯȱŠ‘Ž–Š’ŒŠ••¢ǰȱ‘ŽȱŒŠ•Œž•Š’˜—ȱ˜ȱꗊ—Œ’Š•ȱ margin value by using income approach is as follows.

4ȱ —˜›–Š’˜—ȱ ŒŠ—ȱ ‹Žȱ ˜‹Š’—Žȱ Šȱ ‘Ĵ™DZȦȦ‹™œǯ˜ǯ’Ȧž‹“Ž”ȦŸ’Ž Ȧ

’ȦŘřǛœž‹“Ž”’Ž Š‹ŗȩŠŒŒ˜›’˜—ȬŠĞŠ›Ȭœž‹“Ž”ŗǯ

FM

_i

= Y

_i

- BC

_i

- DS

_i

FM

_i

= C

_i

- DS

_i

Where Y_i is the income of the household, BC_i represents the basic consumption of the household, and DS_i is the installment of household debt.

‘Žȱ ‘˜žœŽ‘˜•ȱ ’—Œ˜–Žȱ ’—ȱ ‘Žȱ ŘŖŗśȱ ȱ ’œȱ ‘Žȱ ˜Š•ȱ ’—Œ˜–Žȱ ˜ȱ Š••ȱ ȱ within one year. The basic consumption component⁴ is referring to the type of necessary expenditure used by BPS to calculate the poverty line, which includes food consumption, housing and household facilities, clothing and fashion, and the consumption of various goods and services. Meanwhile, the value of installments of household debt includes short-term and long-term debt repayments.

A second approach is an expenditure approach which is an expenditure approach where income data is proxied through household consumption (total

Œ˜—œž–™’˜—Ǽȱ ‘’Œ‘ȱ’œȱ˜—Žȱ˜ȱ–’—’–’£ŽȱŽ››˜›ȬŽ›–ȱǻŽ››˜›Ǽȱ‘Šȱ˜ŒŒž›œȱžŽȱ˜ȱ‘Žȱ use of revenue data from survey results that tend to be biased. Mathematically, the

ŸŠ•žŽȱ˜ȱꗊ—Œ’Š•ȱ–Š›’—ȱ’œȱŒŠ•Œž•ŠŽȱ‹¢ȱ‘Žȱ˜••˜ ’—ȱ˜›–ž•Šǯ

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š Śśř

where C_i is the total consumption of a household and DS_i shows the installment of household debt.

The total household consumption is calculated from all of the consumption

’Ž–œȱ Œ˜—Š’—Žȱ ’—ȱ ȱ ŘŖŗśȱ ŠŠȱ œžŒ‘ȱ Šœȱ ˜˜ȱ Œ˜—œž–™’˜—Dzȱ ‘˜žœ’—ȱ Š—ȱ household facilities; clothing and fashion; various goods and services; recreation,

Š¡Žœǰȱ•ŽŸ’Žœǰȱ˜—Š’˜—œǰȱ’—œž›Š—ŒŽȱŠ—ȱ£Š”ŠDzȱ™Š›¢ȱŠ—ȱŒŽ›Ž–˜—’Š•ȦŽŠœȱ™ž›™˜œŽœDzȱ transportation, service vehicles and fuel; and other consumption. The Basic Consumption variable (BC) is not included in the calculation to avoid double counting because it is included in the total consumption.

řǯŘǯȱŠŠȱ

ŠŠȱ žœŽȱ ’—ȱ ‘’œȱ œž¢ȱ ’—Œ•žŽȱ ‘Žȱ ŘŖŗśȱ Š’˜—Š•ȱ Š—ȱ Ž’˜—Š•ȱ ’—Š—Œ’Š•ȱ

ŒŒ˜ž—œȱǭȱŠ•Š—ŒŽȱ‘ŽŽœȱǻǼȱŠŠȱžœŽȱ˜ȱŠ—Š•¢£Žȱ‘ŽȱŠ›ŽŠŽȱ‘˜žœŽ‘˜•ȱ

Ÿž•—Ž›Š‹’•’¢ȱ Š—ȱ ‘Žȱ ŘŖŗśȱ ˜žœŽ‘˜•ȱ ž›ŸŽ¢ȱ ǻǼȱ ŠŠȱ žœŽȱ ˜ȱ ’Ž—’¢ȱ ‘Žȱ vulnerability of individual households.

Š’˜—Š•ȱŠ—ȱŽ’˜—Š•ȱȱŠŠȱǻŘŖŗśǼ

The FABS data is part of the Integrated Economic Account, which covers the framework of sectoral accounts developed through cooperation between Bank Indonesia (BI) and the Central Bureau of Statistics (BPS), in meeting the needs

˜ȱ ’—Ž›ŠŽȱ ŠŠȱ Š—ȱ ŒŠ—ȱ ŽœŒ›’‹Žȱ ‘Žȱ Œ˜—’’˜—ȱ ˜ȱ ‘Žȱ ŽŒ˜—˜–¢ȱ Š—ȱ ꗊ—Œ’Š•ȱ

œ¢œŽ–ȱŠ—ȱ‘Žȱ›’œ”ȱ’—ȱŠ—ȱŽŒ˜—˜–’ŒȱœŽŒ˜›ȱ ‘’Œ‘ȱ–Š¢ȱŠěŽŒȱ‘Žȱ˜ŸŽ›Š••ȱꗊ—Œ’Š•ȱ

œ¢œŽ–ǯȱ‘ŽȱŠŠȱ›Žšž’›Ž–Ž—ȱ’œȱ’—ȱ•’—Žȱ ’‘ȱ˜—Žȱ˜ȱ‘ŽȱŠŠȱ Š™œȱ—’’Š’ŸŽœȱǛȱŗśȱ

˜ȱ ȬŘŖȱŒ˜ž—›’Žœȱ‘Šȱ Ž›Žȱ’—’’ŠŽȱ‹¢ȱ—Ž›—Š’˜—Š•ȱ˜—ŽŠ›¢ȱž—ȱǻǼȱŠ—ȱ

’—Š—Œ’Š•ȱŠ‹’•’¢ȱ˜Š›ȱǻǼȱ’—ȱŘŖŖşǯ

ȱ Š—ȱ ȱ –ž•’ȱ ¢ŽŠ›•¢ȱ ‘ŠŸŽȱ ’–™•Ž–Ž—Žȱ ‘Žȱ Žě˜›ȱ ˜ȱ ž•ę••ȱ ‘Žȱ

›ŽŒ˜––Ž—Š’˜—ȱœ’—ŒŽȱŘŖŗŘǯȱœȱ™Š›ȱ˜ȱ‘ŽȱŽě˜›ǰȱȱ‘Šœȱ™Ž›˜›–Žȱ‘Žȱ™›Ž™Š›Š’˜—ȱ of FABS data as part of the sectoral account framework for each institutional sector,

‹˜‘ȱ —Š’˜—Š••¢ȱ Š—ȱ ›Ž’˜—Š••¢ȱ œ’—ŒŽȱ ‘Žȱ ‹Ž’——’—ȱ ˜ȱ ŘŖŗŚȱ ž—Ž›ȱ ‘Žȱ ›ŠŽ’Œȱ Program # 4 Architecture of Strategic Functionality of Bank Indonesia (AFSBI) - Preparation of National and Regional Balance Sheet.

ȱŠŠȱ’œȱžœŽž•ȱ˜›ȱŠ—Š•¢£’—ȱ’—Ž›ȬœŽŒ˜›Š•ȱ•’—”ŠŽœǰȱꗊ—Œ’Š•ȱ’–‹Š•Š—ŒŽœȱ

’—ȱ ’—’Ÿ’žŠ•ȱ œŽŒ˜›œȱ Š—ȱ Š—Š•¢£’—ȱ ‘Žȱ Œ˜—Š’˜—ȱ ŽěŽŒȱ ˜ȱ œ‘˜Œ”ȱ ’—ȱ Šȱ œŽŒ˜›ȱ against other sectors that may cause systemic risks and potentially trigger a crisis.

Ž’˜—Š••¢ǰȱ ȱ ŠŠȱ ’œȱ Š•œ˜ȱ žœŽž•ȱ ˜›ȱ ŽŽ›–’—’—ȱ ›Ž’˜—Š•ȱ ꗊ—Œ’Š•ȱ œ¢œŽ–œȱ

Œ˜–™›Ž‘Ž—œ’ŸŽ•¢ȱŠ—ȱ’Ž—’¢’—ȱ›Ž’˜—Š•ȱꗊ—Œ’Š•ȱ’–‹Š•Š—ŒŽœǯ

In more detail, FABS data includes Financial Account (FA) and Balance

‘ŽŽȱ ǻǼȱ ŠŠǯȱ ȱ ŠŠȱ ’œȱ ‘Žȱ ŠŠȱ ˜ȱ ’—Ž›ȬœŽŒ˜›ȱ ŠœœŽȱ Š—ȱ ꗊ—Œ’Š•ȱ •’Š‹’•’’Žœȱ

›Š—œŠŒ’˜—œǰȱ ‘’Œ‘ȱœ‘˜ œȱ‘Žȱꗊ—Œ’Š•ȱ̘ œȱ‹Ž ŽŽ—ȱ’—œ’ž’˜—Š•ȱœŽŒ˜›œȱ‹˜‘ȱ national and regional (certain regions). Meanwhile, the BS data is the position data of assets and liabilities owned by the institutional sectornationally or regionally (in a particular region) as well as in certain period. The BS data consists of the initial position balance sheet and the end position balance sheet.

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 ŚśŚ

—œ’ž’˜—Š•ȱŽŒ˜› —œ’ž’˜—Š•ȱŒ˜ŸŽ›ŠŽ

1. Non-Financial Corporation (NFC) Public and Private Non-Financial Companies

2. Central Bank (CB) Bank Indonesia

3. Deposit-taking other than the central bank (ODC)

- Conventional commercial bank - Islamic commercial bank - Conventional BPR - Islamic BPR 4. Other Financial Corporation (OFC) - Pension Funds

- Insurance

- Finance Companies (Finance Companies,

Š —œ‘˜™œǰȱ˜˜™Ž›Š’ŸŽœǰȱŠŸ’—œȱŠ—ȱ˜Š—œǰȱ and Indonesia Exim Bank)

Ȭȱȱ ’—Š—Œ’Š•ȱž¡’•’Š›¢ȱǻǰȱ˜›Ž¡ȱ›ŠŽ›œǰȱǰȱ and BEI)

śǯȱ Ž—›Š•ȱ ˜ŸŽ›—–Ž—ȱǻ Ǽ Ž—›Š•ȱ ˜ŸŽ›—–Ž—ȱŠ—ȱŽ¡Œ•ž’—ȱ˜Œ’Š•ȱŽŒž›’¢

Ŝǯȱ ˜ŒŠ•ȱ ˜ŸŽ›—–Ž—ȱǻ Ǽ ˜ŒŠ•ȱ ˜ŸŽ›—–Ž—ȱǻ›˜Ÿ’—Œ’Š•ǰȱ’œ›’ŒǰȱŠ—ȱ’¢ȱ ˜ŸŽ›—–Ž—Ǽ

ŝǯȱ ˜žœŽ‘˜•ȱǻǼ ˜žœŽ‘˜•ȱŠ—ȱ˜—Ȭ›˜ęȱ—œ’ž’˜—ȱŽ›Ÿ’—ȱ

˜žœŽ‘˜•

Şǯȱ Žœȱ˜ȱ‘Žȱ˜›•ȱǻǼ All Non-Resident

˜ž›ŒŽDZȱŠ—”ȱ—˜—Žœ’ŠȱǻŘŖŗśǼ

ȱŠŠȱŠ›ŽȱŒ•Šœœ’ꮍȱ‹ŠœŽȱ˜—ȱ‘ŽȱŒ•Šœœ’ęŒŠ’˜—ȱ˜ȱ‘Žȱ’—œ’ž’˜—Š•ȱœŽŒ˜›ȱŠœȱ  Ž••ȱŠœȱꗊ—Œ’Š•ȱ’—œ›ž–Ž—œȱ›ŽŠ›’—ȱŠœœŽœȱŠ—ȱ•’Š‹’•’’Žœǯȱ‘ŽȱŒ•Šœœ’ęŒŠ’˜—ȱ˜ȱ the institutional sector used in the national FABS is as follows.

Table 1.

•Šœœ’ęŒŠ’˜—ȱ˜ȱ—œ’ž’˜—Š•ȱŽŒ˜›œȱŠȱŠ’˜—Š•ȱ

‘ŽȱŒ•Šœœ’ęŒŠ’˜—ȱ˜ȱ‘Žȱ’—œ’ž’˜—Š•ȱœŽŒ˜›ȱžœŽȱ’—ȱ‘Žȱ›Ž’˜—Š•ȱȱ’œȱ‹ŠœŽȱ on a center of predominant economic interest in which a sector is considered as a part of a regional institutional sector when it has a large regional economic

’—Ž›ŽœȱŒŽ—Ž›ǯȱ‘ŽȱŒ•Šœœ’ęŒŠ’˜—ȱ˜ȱ‘Žȱ’—œ’ž’˜—Š•ȱœŽŒ˜›ȱ’—ȱ‘Žȱ›Ž’˜—Š•ȱȱ’œȱ as follows.

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š Śśś

—œ’ž’˜—Š•ȱŽŒ˜› —œ’ž’˜—Š•ȱ˜ŸŽ›ŠŽ

1. Non-Financial Corporation (NFC) Public and Private Non-Financial Companies 2. Deposit-taking other than the central

bank (ODC)

- Conventional Commercial Bank - Islamic Commercial Bank - Conventional BPR - Islamic BPR 3. Other Financial Corporation (OFC) - Pension Funds

- Insurance

- Finance Companies (Finance companies, pawnshops, cooperatives, savings, and loans)

Śǯȱ ˜ŒŠ•ȱ ˜ŸŽ›—–Ž—ȱǻ Ǽ ˜ŒŠ•ȱ ˜ŸŽ›—–Ž—ȱǻ›˜Ÿ’—Œ’Š•ǰȱ’œ›’ŒǰȱŠ—ȱ’¢ȱ ˜ŸŽ›—–Ž—Ǽ

śǯȱ ˜žœŽ‘˜•ȱǻǼ ˜žœŽ‘˜•ȱŠ—ȱ˜—Ȭ›˜ęȱ—œ’ž’˜—ȱŽ›Ÿ’—ȱ˜žœŽ‘˜•

6. Rest of Indonesia (ROI) Other sectors outside the region but still in the region of

—˜—Žœ’ŠȱǻŽœȱ˜ȱǰȱŽ—›Š•ȱŠ—”ǰȱŽ—›Š•ȱ ˜ŸŽ›—–Ž—ǰȱ dan Rest of Others)

ŝǯȱ Žœȱ˜ȱ‘Žȱ˜›•ȱǻǼ All Non-Resident Institutions

˜ž›ŒŽDZȱŠ—”ȱ—˜—Žœ’ŠȱǻŘŖŗśǼ

Table 2.

•Šœœ’ęŒŠ’˜—ȱ˜ȱ—œ’ž’˜—Š•ȱŽŒ˜›œȱŠȱǻǼȱŽ’˜—Š•ȱ•ŽŸŽ•

›˜–ȱ‘Žȱ’—œ›ž–Ž—Š•ȱŠœ™ŽŒǰȱ‘ŽȱŒ•Šœœ’ęŒŠ’˜—œȱ˜ȱꗊ—Œ’Š•ȱ’—œ›ž–Ž—œȱžœŽȱ in FABS data are Monetary gold and SDRs; Debt securities; Equity and investment fund share/units; Financial derivatives and employee stock options; Currency and

Ž™˜œ’œDzȱ ˜Š—œDzȱ —œž›Š—ŒŽǰȱ ™Ž—œ’˜—ȱ Š—ȱ œŠ—Š›’£Žȱ žŠ›Š—ŽŽȱ œŒ‘Ž–ŽœDzȱ Š—ȱ Other accounts receivable/payable.

ȱŠŠȱǻŘŖŗśǼ

’Œ›˜ŠŠǰȱžœŽȱ’—ȱ‘’œȱ›ŽœŽŠ›Œ‘ǰȱ’œȱ‘ŽȱŘŖŗśȱȱŠŠȱ ‘’Œ‘ȱ’œȱŠȱ›˜ž’—Žȱœž›ŸŽ¢ȱ

›Žœž•ȱ ¢ŽŠ›•¢ȱ Œ˜—žŒŽȱ ‹¢ȱ Š—”ȱ —˜—Žœ’Šǯȱ ȱ ‹ŽŠ—ȱ ’—ȱ ŘŖŖŜȱ Š—ȱ  Šœȱ ›ŽȬ

’–™•Ž–Ž—Žȱ’—ȱŘŖŗśȱ ’‘ȱ’쎛Ž—ȱœŠ–™•Žȱ›Š–Ž ˜›”œȱŠ—ȱŠ’–œȱ˜ȱŽ¡Š–’—Žȱ‘Žȱ structure of households’ balance sheets in Indonesia, especially households that are

Ž¡™ŽŒŽȱ˜ȱ‘ŠŸŽȱŠŒŒŽœœȱŠ—ȱ’—ĚžŽ—ŒŽȱ˜ȱ‘Žȱ‹Š—”’—ȱœ¢œŽ–ǰȱŽœŠ‹•’œ‘’—ȱŽœœŽ—’Š•ȱ useful data for designing surveillance systems and a nationally representative

‹Š•Š—ŒŽȱ œ‘ŽŽǯȱ —˜›–Š’˜—ȱ ˜—ȱ ‘˜žœŽ‘˜•ȱ ‹Š•Š—ŒŽȱ ’—ȱ ‘Žȱ ŘŖŗśȱ ȱ ŠŠȱ  Šœȱ

˜‹Š’—Žȱ‘›˜ž‘ȱ‘›ŽŽȱšžŽœ’˜——Š’›Žœǰȱ—Š–Ž•¢ȱ˜žœŽ‘˜•ȱžŽœ’˜——Š’›ŽȱǻǼǰȱ

˜žœŽ‘˜•ȱ ¡™Ž—’ž›Žȱ žŽœ’˜——Š’›Žȱ ǻǼǰȱ Š—ȱ —Ž™Ž—Ž—ȱ —’Ÿ’žŠ•ȱ

žŽœ’˜——Š’›ŽȱǻǼǯ

‘ŽȱȱǻŘŖŗśǼȱ’œȱ’–™•Ž–Ž—Žȱœ’–ž•Š—Ž˜žœ•¢ȱ’—ȱŗŘȱ™›˜Ÿ’—ŒŽœȱ›Ž™›ŽœŽ—’—ȱ ŝŗƖȱ ˜ȱ —˜—Žœ’ŠȂœȱ ™˜™ž•Š’˜—ȱ ‹ŠœŽȱ ˜—ȱ ‘Žȱ Š’˜—Š•ȱ ˜Œ’˜ȬŒ˜—˜–’Œȱ ž›ŸŽ¢ȱ ǻǼȱ’—ȱ‘ŽȱꛜȱšžŠ›Ž›ȱ˜ȱŘŖŗřǯȱ‘ŽœŽȱ™›˜Ÿ’—ŒŽœȱ’—Œ•žŽȱ˜›‘ȱž–Š›Šǰȱ

Žœȱž–ŠŽ›Šǰȱ˜ž‘ȱž–ŠŽ›ŠǰȱȱŠ”Š›ŠǰȱŽœȱŠŸŠǰȱŽ—›Š•ȱŠŸŠǰȱŠœȱŠŸŠǰȱ

Š•’ǰȱ˜ž‘ȱŠ•’–Š—Š—ǰȱŠœȱŠ•’–Š—Š—ǰȱ˜›‘ȱž•Š Žœ’ǰȱŠ—ȱ˜ž‘ȱž•Š Žœ’ǯ

‘Žȱ —ž–‹Ž›ȱ ˜ȱ ‘˜žœŽ‘˜•œȱ ‹Ž’—ȱ œŠ–™•Žȱ ‹¢ȱ ‘Žȱ ŘŖŗśȱ ȱ ’—ȱ ‘Žȱ ŗŘȱ

™›˜Ÿ’—ŒŽœȱ’œȱŘǰŗŝŖȱ‘˜žœŽ‘˜•œǯȱ‘ŽȱœŠ–™•Žȱ’œȱŽŽ›–’—Žȱ‹¢ȱŠ”’—ȱ’—˜ȱŠŒŒ˜ž—ȱ

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 ŚśŜ

the percentage of the population working in each province as well as the average number of household members (ART) in each household.

ž›‘Ž›–˜›Žǰȱ ‘Žȱ ‘˜žœŽ‘˜•ȱ ‹Š•Š—ŒŽȱ œ‘ŽŽȱ ŠŠȱ ’—ȱ ‘Žȱ ȱ ǻŘŖŗśǼȱ ŒŠ—ȱ Š•œ˜ȱ

‹Žȱ žœŽȱ ˜›ȱ œŽŸŽ›Š•ȱ Š—Š•¢£Žœȱ œžŒ‘ȱ Šœȱ –ŠŒ›˜ȱ Š—Š•¢œ’œȱ ˜›ȱ Š—Š•¢œ’œȱ ˜ȱ ‘˜žœŽ‘˜•ȱ income nationally or provincially, microanalysis or analysis of household assets and household access to banking, household debt analysis or behavioral analysis of household debt, as well as analysis of household conditions, and resistance to crises.

IV. RESULTS AND ANALYSIS Śǯŗǯȱ¢•’£ŽȱŠŒ

—ȱŘŖŗśǰȱ‘˜žœŽ‘˜•œȱ Ž›Žȱ‘Žȱ–˜œȱœ’—’ęŒŠ—ȱŒ˜—›’‹ž˜›ȱ˜ȱ‘Žȱ—Š’˜—Š•ȱŠœœŽœǰȱ

ŠŒŒ˜ž—’—ȱ ˜›ȱ řřƖȱ ˜ȱ ‘Žȱ ˜Š•ȱ —Š’˜—Š•ȱ ŽŒ˜—˜–’Œȱ ŠœœŽœǰȱ –˜œȱ ˜ȱ  ‘’Œ‘ȱ Š›Žȱ ꗊ—Œ’Š•ȱ ŠœœŽœǯȱ ‘Žȱ ™•ŠŒŽ–Ž—ȱ ˜ȱ ‘˜žœŽ‘˜•ȱ ꗊ—Œ’Š•ȱ ŠœœŽœȱ ’œȱ œ’••ȱ ˜–’—ŠŽȱ

‹¢ȱŽšž’¢ȱž—ȱ’œ‹ž›œŽ–Ž—ȱ–Š’—•¢ȱ˜ȱ—˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—œȱŠŒŒ˜ž—’—ȱ˜›ȱ ŚŝƖȱ˜ȱꗊ—Œ’Š•ȱŠœœŽœȱ˜••˜ Žȱ‹¢ȱ‘’›Ȭ™Š›¢ȱž—œȱŒ‘Š——Ž•’—ȱ˜ȱ‹Š—”œȱǻŚŘƖǼǯ

NFC HH ODC OFC CB CG LG

33%

28%

9% 6%

4%5%

15%

Description:

ȱ DZȱ˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—

ȱ DZȱ˜žœŽ‘˜•œ

ODC : Banking

OFC : Non-Bank Financial Institutions

CB : Central Bank ȱ DZȱŽ—›Š•ȱ ˜ŸŽ›—–Ž—

ȱ DZȱŽ’˜—Š•ȱ ˜ŸŽ›—–Ž—

›Š™‘ȱŗǯȱ˜–™˜œ’’˜—ȱ˜ȱŠ’˜—Š•ȱœœŽœȱŽ›ȱŒ˜—˜–’ŒȱŽŒ˜›

‘Žȱ˜–™˜œ’’˜—ȱ˜ȱ˜žœŽ‘˜•ȱœœŽœ ‘Žȱ˜–™˜œ’’˜—ȱ˜ȱ˜žœŽ‘˜•ȱ’—Š—Œ’Š•ȱœœŽœ

51%

49%

Non-Financial Asset Financial Asset

Equity

Currency and deposits Insurance and pension Other accounts receivable Debt securities

47%

42%

7%

3% 1%

›Š™‘ȱŘǯȱ˜–™˜œ’’˜—ȱ˜ȱ˜žœŽ‘˜•ȱœœŽœ

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š Śśŝ

ŽŠ›’—ȱꗊ—Œ’—ǰȱ‘Žȱ–Š“˜›’¢ȱ˜ȱ‘˜žœŽ‘˜•ȱŽ‹ȱœ˜ž›ŒŽœȱŒŠ–Žȱ›˜–ȱ‹Š—”œȱ

›ŽŠŒ‘’—ȱŞřƖȱ˜••˜ Žȱ‹¢ȱȱǻŗŘƖǼȱŠ—ȱ—˜—Ȭꗊ—Œ’Š•ȱœŽŒ˜›ȱǻśƖǼǯȱ˜žœŽ‘˜•ȱ

Ž‹ȱ’—œ›ž–Ž—œȱŠ›Žȱ˜–’—ŠŽȱ‹¢ȱ•˜Š—œȱǻşŝƖǼȱ–˜œ•¢ȱ›˜–ȱ‹Š—”’—ǯȱ‘Žȱœ‘Š›Žȱ

˜ȱ ’—’Ÿ’žŠ•ȱ •˜Š—œȱ ˜ȱ ˜Š•ȱ ‹Š—”ȱ •˜Š—œȱ  Šœȱ ŚŚƖȱ ’—ȱ ŘŖŗśǰȱ –˜œ•¢ȱ žœŽȱ ˜›ȱ ‘Žȱ

ž•ę••–Ž—ȱ˜ȱŒ˜—œž–™’˜—ȱǻŜŗƖǼǯ

™Š’Š••¢ǰȱ ‘Žȱ ™›˜Ÿ’—ŒŽȱ  ’‘ȱ ‘Žȱ •Š›Žœȱ œ‘Š›Žȱ ˜ȱ ‘˜žœŽ‘˜•ȱ ꗊ—Œ’Š•ȱ ŠœœŽœȱ

˜ȱ ȱ ’œȱ ȱ Š”Š›Šȱ  ’‘ȱ ŗřŘǯŘŜƖǰȱ  ‘Ž›ŽŠœȱ ‘Žȱ –Š“˜›’¢ȱ ˜ȱ ‘Žȱ ŠœœŽœȱ Š›Žȱ

Œ‘Š——Ž•Žȱ˜ȱ—˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—œȱ’—ȱŽšž’¢ȱǻśŗƖǼǰȱ’–™•¢’—ȱ‘Žȱ’–™˜›Š—ŒŽȱ

˜ȱ‘Žȱ›˜•Žȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱ˜ȱ‘ŽȱŽŒ˜—˜–¢ȱ’—ȱ‘Žȱ›˜Ÿ’—ŒŽȱ˜ȱȱŠ”Š›Šȱ

‘›˜ž‘ȱꗊ—Œ’—ȱ˜ȱŒ˜›™˜›Š’˜—œȱ‘ŠȱŒŠ—ȱ‹ŽȱžœŽȱ˜›ȱ‹žœ’—ŽœœȱŽ¡™Š—œ’˜—ǯ

‘ŽȱŒ˜–™˜œ’’˜—ȱ˜ȱ‘˜žœŽ‘˜•ȱꗊ—Œ’Š•ȱŠœœŽœȱ’—ȱȱŠ”Š›Šȱ’œȱ–žŒ‘ȱ‘’‘Ž›ȱ

‘Š—ȱ‘Žȱ˜‹•’Š’˜—ǰȱ’—’ŒŠ’—ȱ‘ŠȱŠ”Š›Šȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱ‘Šœȱ‘Žȱ™˜Ž—’Š•ȱ˜ȱ

‹ŽŒ˜–ŽȱŠȱœ˜ž›ŒŽȱ˜ȱꗊ—Œ’—ȱ˜›ȱ‘Žȱ›Ž’˜—Š•ȱŽŒ˜—˜–’ŒȱŠŒ’Ÿ’¢ȱ˜ȱȱŠ”Š›Šǯ ›Š™‘ȱřǯȱ’—Š—Œ’—ȱ˜ž›ŒŽœǰȱ’—Š—Œ’—ȱ—œ›ž–Ž—œǰ

Š—ȱ˜žœŽ‘˜•ȱŠœŽȱ›Ž’ȱœŠŽ

˜ž›ŒŽœȱ˜ȱ˜žœŽ‘˜•ȱ’—Š—Œ’— ˜žœŽ‘˜•ȱ’—Š—Œ’—ȱ Instrument

˜žœŽ‘˜•ȱ›Ž’ȱ‹¢ȱœŠŽ

Table 3.

’—Š—Œ’Š•ȱœœŽœȱŠ—ȱ˜–Žœ’Œȱ’Š‹’•’’Žœȱ‹¢ȱ›˜Ÿ’—ŒŽȱǻƖȱ˜ȱ Ǽ

DKI Jkt West Java

East Java

East Kalimantan

North Sulawesi

North Sumatera

West Sumatera

South Sumatera Financial Asset

Liabilities

132.26%

16.87%

39.01%

14.28%

38.95%

11.73%

30.19%

6.75%

38.52%

26.01%

28.60%

14.78%

24.34%

14.78%

35.07%

14.45%

Province Balance Sheet

Source: RFABS (2015)

* Some provinces can not be shown because the data are not complete

Bank IKNB Non-Financial Consumption Capital Asset

Investment Loans

Other accounts payable 5%

12%

83% 97%

3%

60.85%

27.93%

11.22%

Bulletin of Monetary Economics and Banking, Volume 20, Number 4, April 2018 ŚśŞ

ŚǯŘǯȱž•—Ž›Š‹’•’¢ȱ—Š•¢œ’œȱœ’—ȱ‘ŽȱŠ•Š—ŒŽȱ‘ŽŽȱ™™›˜ŠŒ‘ȱǻǼ

The analysis of household vulnerability, using balance sheet risk indicator, indicated that generally, the liquidity and solvency risk indicator is relatively stable, although it has experienced pressure as a result of the continuing economic

œ•˜ ˜ —ȱ ’—ȱ ŘŖŗśǯȱ ›˜–ȱ ‘Žȱ œ˜•ŸŽ—Œ¢ȱ œ’Žǰȱ ’Š‹’•’’Žœȱ ˜ȱ œœŽȱ Š—ȱ ’Š‹’•’’Žœȱ

˜ȱ ȱ ˜ȱ ‘˜žœŽ‘˜•œȱ Š›Žȱ ž—Ž›ȱ ŘŗƖȱ  ’‘ȱ Šȱ ˜ — Š›ȱ ›Ž—ǯȱ ‘Žȱ ŽŒ•’—Žȱ ’—ȱ

’Š‹’•’’Žœȱ˜ȱœœŽȱ’—’ŒŠ˜›ȱŸŠ•žŽȱ’—ȱŘŖŗśȱ Šœȱ›’Ž›Žȱ‹¢ȱ‘Žȱ›˜ ‘ȱ˜ȱꗊ—Œ’Š•ȱ

ŠœœŽœȱ ›ŽŠŒ‘’—ȱ ŘŖƖȱ ǻ¢˜¢Ǽȱ  ‘’Œ‘ȱ ’œȱ –žŒ‘ȱ ‘’‘Ž›ȱ Œ˜–™Š›Žȱ ˜ȱ ‘Žȱ ›˜ ‘ȱ ˜ȱ

•’Š‹’•’’Žœȱ ˜ȱ ŜƖȱ ǻ¢˜¢Ǽǯȱ ‘Žȱ œ•˜ ’—ȱ ›˜ ‘ȱ ’—ȱ ‘˜žœŽ‘˜•ȱ •’Š‹’•’’Žœȱ Š•œ˜ȱ •Žȱ ˜ȱ Šȱ

ŽŒ•’—Žȱ’—ȱ‘ŽȱŸŠ•žŽȱ˜ȱ‘Žȱ’Š‹’•’’Žœȱ˜ȱ ȱ’—’ŒŠ˜›œȱ›˜–ȱ‘Žȱ™›ŽŸ’˜žœȱ™Ž›’˜ǰȱ indicating that the household sector in Indonesia is quite solvent, especially in

Œ˜ŸŽ›’—ȱœ‘˜›ȬŽ›–ȱŠ—ȱ•˜—ȬŽ›–ȱŽ‹ȱ’—ȱŘŖŗśǯ

Cumulatively, the liquidity risk indicator proxied by the saving ratio showed an increasing trend compared to the previous period as a result of the increased growth of household savings to banks. The increase in household liquidity implies

‘Šȱ‘˜žœŽ‘˜•œȱ‘ŠŸŽȱœžĜŒ’Ž—ȱ•’šž’ȱŠœœŽœȱ˜ȱ–ŽŽȱ‹Šœ’Œȱ—ŽŽœȱŠ—ȱ›Ž™Š¢ȱœ‘˜›Ȭ term debt.

ŠœŽȱ ˜—ȱ ‘Žȱ ȱ –Š›’¡ȱ ˜ȱ —Žȱ ꗊ—Œ’Š•ȱ ™˜œ’’˜—ȱ ’—’ŒŠ˜›œǰȱ ‘Žȱ ‘˜žœŽ‘˜•ȱ

œŽŒ˜›ȱ Šœȱ‘ŽȱœŽŒ˜›ȱ ’‘ȱ‘Žȱ–˜œȱœ’—’ęŒŠ—ȱꗊ—Œ’Š•ȱœž›™•žœȱ’—ȱŘŖŗśǰȱ ‘’Œ‘ȱ’œȱ

›Ž™›ŽœŽ—Žȱ ‹¢ȱ ‘Žȱ ˜Š•ȱ —Žȱ ꗊ—Œ’Š•ȱ ™˜œ’’˜—ȱ ŸŠ•žŽȱ ›Ž™›ŽœŽ—’—ȱ řşǯŜŞƖȱ ˜ȱ ‘Žȱ ǯȱ‘ŽȱŸŠ•žŽȱ˜ȱ‘Žȱ—Žȱꗊ—Œ’Š•ȱ™˜œ’’˜—ȱ˜ȱ‘˜žœŽ‘˜•œǰȱŠ–˜—ȱ˜‘Ž›œǰȱŒ˜–Žœȱ

›˜–ȱ‘Žȱ˜ —Ž›œ‘’™ȱ˜ȱꗊ—Œ’Š•ȱŠœœŽœȱ‘Šȱ›ŽŠŒ‘ŽȱřŘƖȱ˜ȱ‘Žȱ—Š’˜—Š•ȱꗊ—Œ’Š•ȱ assets, implying the importance of the role of the household sector in the economy

Šœȱ˜—Žȱ˜ȱ‘Žȱ•Š›Žœȱœ˜ž›ŒŽœȱ˜ȱ˜–Žœ’Œȱꗊ—Œ’—ǯȱ‘Žȱ’œ›’‹ž’˜—ȱ˜ȱ‘˜žœŽ‘˜•ȱ ꗊ—Œ’Š•ȱ ŠœœŽȱ ǻ–Š“˜›’¢Ǽȱ ˜Žœȱ ˜ȱ ‘Žȱ —˜—Ȭꗊ—Œ’Š•ȱ Œ˜›™˜›ŠŽȱ œŽŒ˜›ȱ  ’‘ȱ ‘Žȱ —Žȱ ꗊ—Œ’Š•ȱ™˜œ’’˜—ȱŸŠ•žŽȱ˜ȱ‘˜žœŽ‘˜•œȱ˜ȱ‘ŽȱŒ˜›™˜›Š’˜—ȱ‘Šȱ›ŽŠŒ‘ŽȱŘŞǯşśƖȱ˜ȱ ǯ

›Š™‘ȱŚǯȱŠ•Š—ŒŽȱ‘ŽŽȱ’œ”ȱ—’ŒŠ˜›

Source: NFABS 2015, processed data

0%

Liabilities to GDP Saving to Expenditure Liabilities to Asset

5%

10%

15%

20%

25%

20,14% 20,14%

17,18%

2014Q4 2015Q4

‘Žȱ—Š•¢œ’œȱ˜ȱ’œ”ȱ›˜ę•ŽȱŠ—ȱ’—Š—Œ’Š•ȱž•—Ž›Š‹’•’¢ȱ˜ȱ˜žœŽ‘˜•œȱ’—ȱ—˜—Žœ’Š Śśş

šž’¢ȱ ’—œ›ž–Ž—œȱ ˜–’—ŠŽȱ ‘˜žœŽ‘˜•ȱ ꗊ—Œ’—ȱ ˜ȱ ‘Žȱ —˜—Ȭꗊ—Œ’Š•ȱ corporate sector^śȱ˜ȱ ‘’Œ‘ȱşŞƖȱ˜ȱ‘˜žœŽ‘˜•ȱꗊ—Œ’Š•ȱŠœœŽœȱ’—ȱ‘Žȱ˜›–ȱ˜ȱŒŠ™’Š•ȱ ǻŚŜǯŚŗƖȱ˜ȱ˜Š•ȱꗊ—Œ’Š•ȱŠœœŽœǼȱŠ›Žȱ’œ‹ž›œŽȱ˜ȱ—˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—œǯȱ‘Žȱ

Š–˜ž—ȱ˜ȱ‘˜žœŽ‘˜•ȱꗊ—Œ’—ȱ˜ȱ‘Žȱ—˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—ȂœȱœŽŒ˜›ȱœ‘˜ Žȱ the high interconnection between the two sectors.

This causes the household sector to tend to be exposed to capital loss risk or

•’šž’’¢ȱ ›’œ”ȱ  ‘Ž—ȱ ‘Žȱ Œ˜›™˜›Š’˜—ȱ ’œȱ ž—Ž›ȱ ꗊ—Œ’Š•ȱ ™›Žœœž›Žȱ ˜›ȱ ŽŸŽ—ȱ ŽŠž•ǯȱ The risk of capital loss occurs when a household sells an equity asset in the form

˜ȱ Šȱ Œ˜›™˜›Š’˜—ȱ œ˜Œ”ȱ Šȱ Šȱ ™›’ŒŽȱ •˜ Ž›ȱ ‘Š—ȱ ‘Žȱ ™ž›Œ‘ŠœŽȱ ™›’ŒŽǯȱ ’šž’’¢ȱ ›’œ”ȱ

˜ŒŒž›œȱ ‘Ž—ȱ‘ŽȱŽšž’¢ȱŠœœŽȱ’œȱ’ĜŒž•ȱ˜ȱ•’šž’ŠŽǰȱ–Š’—•¢ȱžŽȱ˜ȱŠŸŽ›œŽȱ–Š›”Žȱ

œŽ—’–Ž—ȱ˜ŸŽ›ȱ‘ŽȱŒ˜–™Š—¢Ȃœȱ•˜—ȬŽ›–ȱꗊ—Œ’Š•ȱŒ˜—’’˜—ǯ

•œ˜ǰȱ ȱ —Žȱ ꗊ—Œ’Š•ȱ ™˜œ’’˜—ȱ –Š›’¡ȱ Š•œ˜ȱ œ‘˜ Žȱ Šȱ ‘’‘ȱ ’—Ž›Œ˜——ŽŒ’˜—ȱ

‹Ž ŽŽ—ȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱŠ—ȱ‹Š—”’—ǯȱ‘ŽȱŸŠ•žŽȱ˜ȱ‘˜žœŽ‘˜•ȱꗊ—Œ’Š•ȱŠœœŽœȱ’—ȱ

‘Žȱ˜›–ȱ˜ȱŽ™˜œ’œȱǻŒž››Ž—Œ¢ȱǭȱŽ™˜œ’Ǽȱ˜ȱŚŘǯŗśƖȱ’œȱ˜–’—ŠŽȱ‹¢ȱ‘Žȱ’œ›’‹ž’˜—ȱ

˜ȱŽ™˜œ’œȱ˜ȱ‘Žȱ‹Š—”’—ȱœŽŒ˜›ȱ‘Šȱ›ŽŠŒ‘ŽȱşŘƖǯȱ‘žœǰȱ‘Žȱ‹Š—”’—ȱœŽŒ˜›ȱŽ—œȱ to be exposed to the risk of withdrawal of funds that can be done by households

Žœ™ŽŒ’Š••¢ȱ ‘Ž—ȱŽ¡™Ž›’Ž—Œ’—ȱŠȱꗊ—Œ’Š•ȱŽęŒ’ȱ˜ȱ–ŽŽȱ•’šž’’¢ȱ—ŽŽœǯ

˜›ŽȱŒ˜–™›Ž‘Ž—œ’ŸŽ•¢ǰȱ‘Žȱꗊ—Œ’Š•ȱ’—Ž›Œ˜——ŽŒ’˜—ȱ‹Ž ŽŽ—ȱ‘Žȱ‘˜žœŽ‘˜•ȱ

œŽŒ˜›ȱŠ—ȱ‘Žȱ‹Š—”’—ȱœŽŒ˜›ǰȱ‘Žȱ‘˜žœŽ‘˜•ȱœŽŒ˜›ȱ ’‘ȱ—˜—Ȭꗊ—Œ’Š•ȱŒ˜›™˜›Š’˜—œȱ and other sectors can be seen in the graph below.

ś Includes ownership of corporate equity by another corporation, assuming ultimate shareholder is an individual or a household

Table 4.

ȱŽȱ’—Š—Œ’Š•ȱ˜œ’’˜—ȱŠ›’¡ȱ’—ȱ‘ŽȱŚȱ˜ȱŘŖŗś

Source : NFABS 2015, data diolah

Holder of Liability (Creditor Sector) (In percent of GDP)

Issuer of the Liability (Debtor Sector)

NFC TOTAL NFC HH ODC OFC CB CG LG ROW

-70.34%

-28.95%

-6.19%

-1.67%

1.76%

-5.80%

-0.88%

-28.60%

39.72%

0.00%

28.60%

5.10%

2.27%

-12.57%

16.32%

0.00%

2.31%

0.11%

0.9%

1.56%

0.00%

0.03%

-0.27%

0.00%

-14.26%

-0.42%

5.80%

-1.42%

-2.04%

-0.15%

0.27%

-16.32%

1.10%

-2.08%

-1.76%

-7.61%

-0.13%

0.15%

-0.03%

12.57%

0.81%

-1.90%

1.67%

1.14%

0.13%

2.04%

0.00%

-2.27%

0.98%

-6.44%

6.19%

-1.14%

7.61%

1.42%

-1.56%

-5.10%

39.68%

28.95%

6.44%

1.90%

2.08%

0.42%

-0.11%

0.00%

HH ODC OFC CB CG LG ROW