Track: Engineering Management
Abstract
The purpose of this study is to identify the factors that cause financial system instability. This study uses the Profitability Model which is represented by Return on Assets (ROA) as an indicator of Financial System Stability (FSS) as well as the dependent variable. As for the independent variables, this study uses the Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL), Composite Stock Price Index (ISHG), and Assets. The data used in this study were cross-sectional variables between 2015-2019, which were processed using the Econometric Model of Panel Data Regression Analysis and Eviews 9.0. Research findings indicate that CAR and NPL have a significant influence on the creation of FSS through the profitability model.