Regulatory Alerts2023-08-17
Added · Updated
Stress Tests Required from Banks Based on End of 2022 Data
Banks operating in Jordan are required to conduct sensitivity analysis and scenario stress tests based on their financial data as of December 31, 2022, with results due by the end of April 2023. Sensitivity tests, covering credit, credit concentration, market, liquidity, climate change, geopolitical tensions, and operational risks, must be applied at the branch level in Jordan and on consolidated financial statements. Scenario tests, focusing on macroeconomic variables like economic growth, unemployment, inflation, and interest rates, are to be applied only at the branch level in Jordan. These tests involve specific thresholds such as 50-150% increases in non-performing loans, 15-25% exchange rate fluctuations, 100-200 basis point interest rate changes, and various deposit withdrawal and facility default percentages.