Regulatory Alerts2022-03-27
Added · Updated
Central Bank of Jordan Circular on Stress Testing Requirements for Banks (2021 Data)
The Central Bank of Jordan mandates that banks conduct stress tests based on end-of-year 2021 data across pandemic impacts, climate risks, credit concentration, market risks, liquidity, and operational risks. Specific requirements include calculating impacts from defined default rates, such as a 100% increase in direct non-performing facilities and specific shocks to the Jordanian Dinar exchange rate and interest rates. Banks must also apply macroeconomic scenarios, including a severe stress case projecting a -2.6% GDP growth rate and 30.2% unemployment, to predict non-performing loan ratios using multiple regression analysis.
Share