The Effect of Operational Efficiency and Capital Adequacy Ratio on Bank Rakyat Indonesia Stability Moderated by Inflation and Economic Policy Uncertainty

Abstract

This paper investigates the impact of operational efficiency, capital adequacy ratio, inflation, economic policy uncertainty on Bank Rakyat Indonesia Stability. Using a sample of BRI quarterly financial statements from 2006 to 2024 with a total of 74 observations. Data analysis in this research used Smart PLS 3.0. The results show that operational efficiency, capital adequacy ratio, and economic policy uncertainty have a significant negative impact on the stability of BRI Bank. Inflation has a significant positive impact on the stability of BRI Bank. Additional analysis shows that economic policy uncertainty can weaken the influence of the capital adequacy ratio on the stability of BRI bank. The findings of this study highlight EPU as an additional procyclical factor influencing bank behavior, strategies and policies.

Keywords: Bank Stability, Operational Efficiency, Capital Adequacy Ratio, Inflation, Economic Policy Uncertainty