Regulatory Alerts2020-05-05
Added · Updated
Stress Testing Data for Banks as of End of 2019
The document mandates stress testing data for banks as of the end of 2019, requiring them to conduct sensitivity analysis tests for credit, market, and liquidity risks, as well as operational risk and macroeconomic scenario tests. Banks must apply specific shocks, such as a 50% to 150% increase in indirect facilities, a 10% to 25% decrease in the Jordanian Dinar, and a 100 to 200 basis point increase in interest rates, to measure impacts on profitability and regulatory capital adequacy ratios. The tests include specific scenarios for the spread of the Corona Virus (COVID-19), requiring calculations of multi-factor shocks on capital adequacy and profit provisions based on medium and severe intensity assumptions. Banks are required to submit these results to the Central Bank annually, using provided models and macroeconomic data from Appendix 3.
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