Microprudential Aspect Based on Rule of Thumb in Banking Industry

Abstract

An Important element of the microprudential in banking industry is its measurement of financial performance. The measurement can be illustrated as financial ratios that is able to empower all resources possessed by bank to achieve the certain goals, target or missions which are intended to be accomplished by a bank, that is to prosper its people. The involvement of regulator in supporting the success of government heavily depends on the characteristic of its banking community. While good measurement become the main tool to manage banking in the more global world, reform in rule of thumb in the development of financial performance is a very crucial factor to achieve the ultimate goal of microprudential. The regulator movement as an administrative reform is better than policy enforcement act. It is also an act of culture change reflecting and challenging basic financial performance value.