The Household Financial Conduct And Its Impact On Stability Financial System

Abstract

The importance of maintaining Financial System Stability is the basis for economic sustainability. One of the pillars of national economic resilience is the role of the household sector as a fundamental object so that supply and demand reach an equilibrium point. Household financial behavior is closely related to income levels and household credit behavior toward Financial System Stability. Therefore, the aim of this study is to determine whether there is an effect of financial behavior in the household sector on financial system stability. Data collection using a purposive sampling method was carried out using a questionnaire through the Google Forms application to 400 households in the Tangerang area. The analytical tool used is Structural Equation Modeling (SEM) with SmartPLS 3.0 to explain the correlation between endogenous and exogenous variables. The loading factor results indicate that financial behavior (0.285), household income (0.232), and household credit behavior (0.229) have a significant effect on the financial stability system. Meanwhile, financial behavior has a value of 0.599 on household income and 0.588 on household credit behavior, indicating a direct effect.