The Effect of the Human Development Index on Banking Stability in ASEAN

Global phenomena show that the quality of human development plays an important role in various aspects of the economy, including the stability of the banking sector. In the ASEAN region, developing countries such as Indonesia, Malaysia, Vietnam, the Philippines, and Thailand are undergoing rapid economic transformation, which can affect the dynamics of banking stability. The study aims to analyze the relationship between the Human Development Index (HDI) and banking stability in these countries, assuming that improving the quality of human development can strengthen the stability of the emerging banking sector. The study used panel data from 2000 to 2021 obtained from Our World in Data and the International Monetary Fund. The analysis technique in this study uses panel data regression, namely the fixed effect model, to capture the specific influence of HDI on banking stability in each country. The results show that the increase in HDI contributes positively to banking stability in ASEAN, which shows the importance of improving the quality of life that supports economic stability. The main contribution of this research is to provide empirical evidence on the role of HDI as an important factor in strengthening the stability of the banking sector, as well as to enrich the literature on the relationship between human development and financial stability in developing countries.