MODEL DYNAMICS AND EQUILIBRIUM STABILITY ANALYSIS IN SYSTEMS OF TWO BANKS THROUGH LOANS BETWEEN BANKS

• Main Author: Stefano, Brian
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/65250
• Institution: Institut Teknologi Bandung

Banks are one of many financial intermediaries that operates by collecting public funds and giving loans using collected funds in order to improve public welfare. To ensure banks could operate, banks have to be a safe place for people to put their money in. secondly, banks have to select good debtors that will give at least adequate returns to avoid bank runs. In order to achieve mentioned reasons, banks have to maintain equal balance sheet. Gains and losses as a result of banks’ operation will be calculated in equity. In this thesis, a predator-prey model will be made to represent the bank model with loans as the predators and deposits as the preys. The model constructed for one bank will be improved for two banks with desired interactions included in the model. This model consists of three elements which are deposit rates, loan rates, and equity rates. With data implementation, parameters of the elements are estimated using Spiral Optimization Algorithm by minimizing the objective function which is the MAPE average of all elements. The equilibrium point of the sistem are also determined with their stability analysis. Lastly, parameters of a bank will be changed to observe the effects given to the equilibrium point of the differential equation in the bank or the other bank interacting with the first bank. The results of parameter changes will be analyzed further. 14 in 24 good models are achieved with 8 of the 14 good models have stable equilibrium point.