The effect of leverage risk, credit risk, liquidity risk and interest rate on operating expense to operating income at regional development banks in indonesia with economic growth as mediation and inflation as moderation
Keywords:
Economic Growth, Inflation, Bank Operational EfficiencyAbstract
This paper aims to analyze the direct effect of Leverage Risk, Credit Risk, Liquidity Risk and Interest Rate on BOPO, the role of economic growth as a mediator, and the role of inflation in moderating the relationship between Leverage Risk, Credit Risk, Liquidity Risk, Interest Rate and BOPO at regional development banks in Indonesia. This research is a quantitative study with an explanatory approach. The population and sample in this study are all regional development banks (BPD) totaling 27 banks. The data used is secondary data and using the Partial Least Square Structural Equation Modeling (PLS-SEM). Research results show 1) CAR and interest rates have a significant influence on bank operational efficiency (BOPO) in Indonesia, with CAR showing a negative influence and interest rates showing a positive influence. 2) Economic growth does not significantly mediate the relationship between CAR and NPL on BOPO, but mediates the effect of LDR and interest rates on BOPO. 3) Inflation moderates the effect of NPL and LDR on BOPO significantly with a negative effect, but does not moderate the effect of CAR and interest rate on BOPO.
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