Abstract :
The word crisis is one word that invokes fear and has a varied and wide impact on human life and activities in the world. It does no matter where the individual human being resides on the surface of the globe. This research proposal is a very hand-in-glove one in its bearing on the crisis, that is currency crisis dovetailing into a financial crisis. Before the crisis in East Asia, the growth of these Asian economies earned them the accolade of the "Asian Economic Miracle." Suddenly, all that changed with a currency crisis that escalated into a deep, financial crisis in 1997, called the "Asian Economic Crisis.
Unfortunately, the program of recapitalization was accompanied by the problem that the banks could not directly run their function as intermediary institutions, especially in channeling credit (lending) to the real sector. The major research question involves what the impact of the bank's recapitalization program was on the real sector in enhancing Indonesian economic recovery from the 1997-1998 crises. There are two main issues in the research. They are banks' performance and effectiveness of the capital injected through bank's recapitalization.