Regulatory Alerts2025-11-05
Added · Updated
Central Bank of Jordan Responses to Banks' Inquiries and Comments on the Internal Capital Adequacy Assessment Process (ICAAP) Instructions
The Central Bank of Jordan clarifies requirements for the Internal Capital Adequacy Assessment Process (ICAAP), mandating that banks submit their ICAAP documentation by the end of April 2026 based on 2025 financial statements. Banks must maintain minimum capital requirements totaling 15.5% under baseline scenarios, including Pillar 1, Pillar 2 add-ons, and buffers, with specific provisions for foreign branches and systemically important banks. The instructions require independent internal validation of risk models, the use of internal methodologies for Pillar 1 risks where appropriate, and the exclusion of risk diversification benefits when measuring individual risks to ensure conservative estimates.
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