مجلة الاقتصاد والتنمية المستدامة
Volume 4, Numéro 3, Pages 270-280
2021-12-01

Stress Tests As A Mechanism To Measure Banks’ Resilience To The Corona Crisis – Jordan’s Experience Study-

Authors : Chaieb Faiza . Djekrif Ali .

Abstract

This study aims to determine the role of stress tests in measuring the resilience of Jordanian banks to shocks caused by the emerging corona epidemic. The study reached a series of findings, the most important of which was that stress tests showed that Jordan’s banking sector would have capital adequacy of 16.7%, 14.9% and 14.2% for 2020, 2021 and 2022 respectively. This is after assuming the worst-case scenario of the increasing negative consequences of the new corona virus and the challenges it poses to the national economy. That is, assuming the above scenario, the capital adequacy ratio will remain higher than Jordan’s minimum of 12% and Basel Committee’s minimum of 10.5%. This means that the Jordanian banking system is generally able to withstand the high risks of the emerging CORONA virus.

Keywords

Stress tests ; shocks ; Corona virus ; central bank of Jordan