Regulatory Alerts2024-05-27
Added · Updated
Central Bank of Jordan: Required Stress Tests for Banks Based on End-of-2018 Data
The Central Bank of Jordan mandates that banks conduct sensitivity and scenario stress tests based on end-of-2018 data to measure impacts on profitability, core capital, and regulatory capital adequacy ratios. Banks must apply specific shocks across credit, market, liquidity, and operational risks, including a 50% to 150% increase in non-performing loans and a 15% to 25% fluctuation in the Dinar exchange rate. The directive requires reporting under medium and severe macro scenarios, such as a 0.0% GDP growth rate with a 20.3% unemployment rate, and mandates the submission of borrower schedules and additional risk-specific tests commensurate with each bank's profile.
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