ABSTRACT We present a mathematical model that describes the bank balance sheets in Indonesia. This model incorporates the use of the loan‐to‐deposit‐ratio‐based reserve requirement macroprudential instrument. Initially, we create a model in the absence of the instrument. We assess the stability of the model and evaluate its performance on Indonesian banking data using spiral optimization. Subsequently, the second model with the instrument is introduced and then evaluated using the data. We evaluate the impact of the instrument's parameters on the variables of the bank's balance sheet with regard to their sensitivity. The stochastic model is examined by including the element of randomness in both withdrawal and nonperforming loans. The findings demonstrate that the model effectively captures the reality of Indonesian banking balance sheets, accurately forecasts the future trajectory of loans and equity growth, and offers valuable insights for regulating the instrument and for its future study.
Ansori et al. (2025) studied this question.