The Covid-19, banking stock price, and policy in Indonesia

This study examines whether COVID-19 has an impact on banking stock price and whether any policy from the Indonesian government and regulators could alleviate its impact. We use time-series daily data from January to July 2020, regression models (ordinary least square and generalized method of moments), and some robustness tests. We find that COVID-19 has a negative effect on the banking stock price, where new deaths have the greatest one. Nonetheless, the policies could mitigate its negative effect to be insignificant on the price. Therefore, it is pivotal to measure COVID-19’s drawback by providing relevant policies.