ASIAN COUNTRIES (ASEAN 6) AND ITS INTRACORRELATION DETERMINATION OF FINANCIAL STABILITY INDEX BETWEEN SOUTHEAST ASIAN COUNTRIES (ASEAN 6) AND ITS INTRACORRELATION

The Economic crisis has impacted the disruption of the stability of a country's financial system, including ASEAN countries. In Indonesia, there is a Financial System Stability Committee (KSSK) whose duties are to coordinate monitoring and maintaining financial system stability. KSSK has the authority to set the criteria and indicators for assessing financial system stability conditions concerning the financial system's stability. The second authority is to evaluate the condition of financial system stability based on input from each member of the Financial System Stability Committee, along with supporting data and information. As an economic area with history, ASEAN countries certainly have a relationship, either strong or weak. This study conducted calculations of the financial stability index (Aggregate Financial Stability Index) built from the Morris framework (2010) consisting of sub-index Financial Development Index, Financial Vulnerability Index, Financial Soundness Index, World Economic Climate Index. The calculation results showed that in ASEAN 6, there were fluctuations in financial stability, and there were variations in the correlation of financial stability. Therefore, improving the financial stability in Indonesia needs to consider the existence of financial stability in other countries.


INTRODUCTION
The economic crisis in mid-1997 that began in Thailand spread to neighboring countries in Asia resulted in economic instability. The impact of the 1997/1998 economic crisis was so far-reaching on the real and financial sectors. In addition, the economic and financial crisis requires a significant amount of recovery costs, although International Monetary Fund has taken over some policies setting in Indonesia.
An infectious economic and financial crisis is inevitable because of economic globalization, where interdependence and depending on other economies is increasingly widespread. Economic instability will occur more often, so this condition must be tackled together as a preventive measure to prevent the crisis from happening again.
The Government of Indonesia established the Financial System Stability Committee, abbreviated as KSSK, which organizes the prevention and handling of financial stability to improve the resilience of Indonesian economies. KSSK members consist of: 1. The Minister of Finance as the coordinator of concurrent members with voting rights; 2. Governor of Bank Indonesia as a member with voting rights; 3. Chairman of the Board of Commissioners of the Financial Services Authority as a member with voting rights; and

LITERATURE STUDY
Bank Indonesia defines a financial system consisting of financial institutions, financial markets, financial infrastructure, and non-financial and household companies, which interact in funding and or provision of economic growth financing (www.bi.go.id). (Schinasi, 2004) states that a stable financial system if it is able to facilitate (not inhibit) economic performance and eliminate financial imbalances that arise endogenously. A stable financial system as a system, always makes adjustments towards balance, after being exposed to the influence of shocks from within and from outside. It can carry out traditional functions related to efficient allocation of resources, to correct price distortions and ensure adequate payment systems and settlement systems, as functions that contribute to overall economic growth and well-being (Albulescu & Goyeau, 2010) In Jordan, Samer. A.M. Al (Al-Rjoub, 2021) uses Financial Stability Index (FSI) to prove that the banking sector has been consciously resilient against shocks and negative economic conditions in Jordan. FSI is intutitively attractive as it could enable policy makers to monitor the banking sector's resilience to shocks and can help in anticipating the source of financial stress to the system.

AFSI Calculation Model
Aggregate Financial Stability Index (AFSI) is an aggregate index developed by (Albulescu, 2008) to analyze the stability of the Romanian financial system and in 2010, Morris built AFSI for the stability of jamaica's financial system. AFSI method is a separate technique that can be used to complement other methods. AFSI provides the possibility for users to compare the level of financial system stability in different periods and between different financial systems, observe the dynamics of changes in the stability level of a financial system, and allow forecasting related to the stability of a financial system. Another advantage of the AFSI method is that it uses a simple way of calculating and easy access to statistical data. In general, the data is quite available, more transparent, and very helpful in defining the stability of a country's financial system (Albulescu & Goyeau, 2010) (Morris, 2010) states that the Aggregate Financial Stability Index (AFSI) has 4 (four) sub-indices as follows:

Financial Development Index (FDI)
Financial Development Index or development index shows that the greater the value of the index, the more financial is growing. This sub-index consists of four indicators. The first indicator is the percentage of total market capitalization to Gross Domestic Product (GDP) which is the percentage between the value of capital in the market or the value of the capital market against GDP. This indicator describes the development and size of the capital market. The larger this indicator indicates that investment is increasing. The next indicator is the percentage of domestic credit to GDP which describes the level of intermediation of financial institutions in this case commercial banks and People's Credit Banks (BPR) which are quite dominant. The higher this indicator shows that financial institutions are better at bridging between owners of excess funds (surplus units) and parties who need funds (unit deficit) and increasing domestic investment. The third indicator is the difference between the interest rate on the loan and the interest rate spread. This indicator illustrates the potential benefits of financial institution intermediation services. However, the larger this indicator also illustrates that financial institutions are increasingly inefficient.
The last indicator is the bank concentration which is the assets of the three largest banks as part of all commercial bank assets. The concentration of banking in Indonesia is quite high after the 1998 crisis because of the number of banks that do mergers. According to Morris (Morris, 2010) the increase in this indicator illustrates the improvement of the efficiency of the banking sector.

Financial Vulnerability Index (FVI)
Financial Vulnerability Index shows that the lower the value of the index, the more vulnerable the financial system and vice versa. The Financial Vulnerability Index consists of eight indicators. The first economic indicator grouped into this sub-index is inflation. Inflation shows an increase in the price of goods in general. The increase in this indicator can be interpreted as a decrease in the value of money against goods that can decrease the level of public confidence in the currency so that the public tends to hold in the form of goods or other currencies. The second indicator is the percentage surplus or deficit of the government's balance of expenditure to GDP. In the event of a budget deficit to cover, the government can print money or debt. The debt can be sourced from the issuance of bonds or foreign loans. Some of each alternative has considerable risks. The third indicator is the percentage of the current account against GDP. The current account deficit can lead to reduced foreign exchange reserves and reduce its contribution to GDP. The fourth indicator is the Real Effective Exchange Rate (REER), which is domestic currencies' actual exchange rate performance against foreign currencies in general in the international economy. The fluctuating changes in this indicator show that the economy through exchange rate adjustments has undergone a significant correction (Albulescu & Goyeau, 2010). The fifth indicator is the percentage of private credit to total credit. This indicator illustrates the proportion of private sector funding through credit for investment and is also potentially bad credit. The sixth indicator is the percentage of loans against deposits. The increase in this indicator shows that it is easier and more efficient for financial institutions to carry out their intermediation functions. The seventh indicator is the percentage of deposits against the money supply. The increase in this indicator illustrates the tendency of people to save money in financial institutions rather than for consumption activities. The last indicator compares the percentage of reserves against deposits with the percentage of money held by the public against the money supply. This indicator reflects the preparation of financial institutions in anticipating massive withdrawals of deposits by the public.

Financial Soundness Index (FSI)
Financial Soundness Index shows that the greater the value of the index, the better the banking sector. FSI consists of five index building indicators.
The first indicator is the percentage of bad loans against total banking credit. Increasing the index will disrupt the liquidity of the banking sector. The second indicator is the Capital Adequacy Ratio (CAR), describing the level of banking capitalization that is a condition of capital adequacy against weighted liquidity risks. The improvement of this indicator illustrates the readiness of banks to overcome liquidity risks. The third indicator is the percentage of capital against total assets. This indicator shows the proportion of capital to all assets owned by the banking sector. The higher this indicator indicates the more liquid and healthier the banking sector. The fourth indicator is Bank Return on Asset (ROA), which measures the rate of return of the banking sector. The larger this indicator reflects greater profits within the banking sector. The fifth indicator is bank Z-Score, which is the level of banking health that describes the possibility of banks can survive not going bankrupt.

World Economic Climate Index (WECI)
World economic climate index developed by the Center for Economic Studies & Research Institute "CESifo" shows the condition of the world economy using the perception of business condition related to investment opportunities. The increase in these indicators illustrates the increasingly better global economic climate. WECI shows that the greater the value of the index, the better global economic conditions. The data used is data in the annual period. The limited availability of data for some individual indicators led to adjustments, so that the data used is data from 2005 to 2017 which is the data with the most available time interval.

RESEARCH METHODS
The data used in this study obtained from various sources in 2005-2018, that can be accessed through the CESifo website, International Monetary Fund (IMF) and World Bank. There are several steps to calculate AFSI. It is collecting and grouping data on each sub-index starting from 2005 to 2018. The next step is to normalize the indicator. The normalization method makes indicator values range from "0" to "1". The value "0" is the worst value and "1" is the best stability condition. So, the greater index shows the better condition of financial stability. The formula for empirical normalization methods is as follows: Or it can be written as follows: AFSI = (9)0,2 ̅̅̅ + 0,4 ̅̅̅ + 0,25 ̅ + 0,15 ̅̅̅̅ The process of forming an index uses equally large weighting for each index building indicator. Van den End (2006) shows in the composition of the preparation of aggregate stability indexes the same weighting and different weights in econometric validation will produce small differences. So to make it simpler to use the same weighting method on each indicator. However, each sub-index has a different weight depending on the number of constituent indicators.

RESULTS AND DISCUSSION
The table of data grouping in the preparation of sub-indices can be seen in Table IV.1 as follows           The Aggregate Financial Stability Index(AFSI) calculated in the study showed a decline in the aggregate index value of some countries when shocks to financial system stability such as the crisis occurred in 2008. If a country's aggregate index is high then the stability of the country's financial system is more stable, but if a country's aggregate index is low then the stability of its financial system is unstable. Published , 2008, 2009, 2012, 2013, and 2014 showed a trend of increasing value and was in the fourth highest position compared to Singapore and Vietnam.   2008, 2009, 2012, 2013, 2014, 2015 and 2016 showing instability. Then, the Aggregate Financial Stability Index (AFSI)Malaysiashowed a slight trend of decline in value and was in the second highest position compared to Indonesia, Singapore, Thailand, and Vietnam.    2005, 2006, 2007, 2008, and 2009. Then, the Aggregate Financial Stability Index (AFSI)of Thailand showed a trend of increasing value and was at the highest position compared to Indonesia, Thailand, and Vietnam. Based on the calculation of AFSI 6 ASEAN countries, we calculate the AFSI data correlation between countries, to find the relations between each country's AFSI. This simple statistical calculation is important to see how close the financial stability relationship between countries is.   Table IV.11, several states can be stated regarding the stability relationship of the intra-country financial system as follows.
• AFSI Indonesia is strongly correlated, significant and in line with AFSI Malaysia, Philippines and AFSI Thailand, If AFSI Malaysia, Philippines and AFSI Thailand experience an increase or decrease in stability, then Indonesia also experienced the same. If Malaysia, the Philippines and Thailand increase the stability of their financial systems, then the stability of Indonesia's financial system also increases. • AFSI Indonesia is quite strong, insignificant and in line with AFSI Singapore, (AFSI Indonesia increases / stabilizes when AFSI Singapore increases / stabilizes, AFSI Indonesia decreases when AFSI Singapore decreases). • AFSI Indonesia is very weak, insignificant and in line with AFSI Vietnam. (AFSI Indonesia increases/stabilizes when Vietnamese AFSI increases/stabilizes, and AFSI Indonesia decreases when VIETNAMESE AFSI decreases, but very weak relations). • AFSI Malaysia is strongly correlated, insignificant and in line with Philippine.
• AFSI Malaysia correlates very weakly, insignificantly, and unidirectionally with AFSI Singapore and AFSI Thailand, (When AFSI Singapore or AFSI Thailand increases/stabilizes, then AFSI Malaysia increases/stabilizes, and vice versa but very weak in relationship). • AFSI Malaysia is strongly, significantly and in line with AFSI Vietnam. If AFSI Malaysia experiences instability, then AFSI Vietnam can be affected by such instability (AFSI Malaysia increases / stabilizes when AFSI Vietnam increases / stabilizes, AFSI Malaysia decreases when AFSI Vietnam decreases). • Philippine AFSI is strongly correlated, insignificant and in line with AFSI Singapore and AFSI Vietnam, (If AFSI Singapore or AFSI Vietnam increases/ stabilizes, then Philippine AFSI increases/stabilizes. If AFSI Singapore or AFSI Vietnam decreases, then THE Philippine AFSI decreases). • Philippine AFSI is strongly correlated, insignificant and in unidirectional with Thailand's AFSI, (Philippine AFSI increases/stabilizes when Thai AFSI increases/stabilizes, Philippine AFSI decreases when Thai AFSI decreases). • AFSI Singapore correlates quite strongly, insignificantly and in unidirectionally with AFSI Thailand, (AFSI Singapore increases/stabilizes when THAI AFSI increases/stabilizes, AFSI Singapore decreases when THAI AFSI decreases). • AFSI Singapore is very weak, insignificant and in the same direction as AFSI Vietnam. (AFSI Singapore increases/stabilizes as VIETNAM AFSI increases/stabilizes, and AFSI Singapore decreases when AFSI Vietnam declines, but very weak relations). • Thai AFSI correlates very weakly, insignificantly and in the opposite direction with AfSI Vietnam, (Thai AFSI increases/stabilizes when Vietnamese AFSI decreases, and Thai AFSI decreases when Vietnamese AFSI increases/stabilizes, but very weak relations).

CONCLUSIONS
Overall, in the observation period, the asean-6 country's financial system stability index is volatile or unstable. In addition, the correlation between AFSI in 5 ASEAN countries showed results that varied even insignificant. Based on these findings, financial sector stability control authorities need to make efforts to further improve the stability of the financial system and monitor against escalation of instability in other countries' financial systems, especially those with strong and significant correlations.
The weight of AFSI calculation using the proportion of sub-index indicators to total sub-indices needs to be reviewed again by looking at their contribution both theoretically and statistically sub index and AFSI as a whole.