A financial Stability Index for Jordan

IF 1.7 Q3 BUSINESS, FINANCE

Journal of Central Banking Theory and Practice Pub Date : 2021-05-01 DOI:10.2478/jcbtp-2021-0018

Samer A. M. Al-Rjoub

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引用次数: 8

Abstract

Abstract Financial stability is an important part of the Central Bank of Jordan (CBJ) role in parallel with maintenance of monetary stability. The impact of the global financial crises from 2007-2009 and the economic slowdown has left the Jordanian banking sector in a generally weaker position than before. This paper constructs an index of financial stability of the Jordanian banking sector that will adequately reflects the effects of the crises in 2008-2009 and measure the resilience of the banking sector against negative shocks. The index is based on the aggregation of the fifteen announced soundness indicators into four main categories: (i) Capital Adequacy, (ii) Earnings and Profitability, and (iii) liquidity to build one aggregate composite index. Using two weighting schemes the Financial Stability Index (FSI) proved to be a good indicator of banking reactions to shocks and changing economic conditions. FSI is intuitively attractive as it could enable policy makers to better monitor the banking sector’s resilience to shocks and can help further in anticipating the sources and causes of financial stress to the system. The index of financial stability of the banking sector in Jordan shows that the banking system has been consciously resilient against shocks and negative economic conditions.

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约旦的金融稳定指数

金融稳定是约旦中央银行(CBJ)与维持货币稳定并行作用的重要组成部分。2007-2009年全球金融危机和经济放缓的影响使约旦银行业处于比以前更脆弱的地位。本文构建了约旦银行业金融稳定性指数，该指数将充分反映2008-2009年危机的影响，并衡量银行业抵御负面冲击的弹性。该指数是基于15个已公布的稳健性指标的汇总，分为四大类:(i)资本充足率，(ii)收益和盈利能力，以及(iii)流动性，以建立一个综合综合指数。使用两种加权方案，金融稳定指数(FSI)被证明是银行业对冲击和不断变化的经济状况的反应的良好指标。金融稳定指数直观上具有吸引力，因为它可以使政策制定者更好地监测银行业对冲击的抵御能力，并有助于进一步预测金融系统压力的来源和原因。约旦银行业的金融稳定指数表明，银行体系有意识地抵御冲击和负面经济状况。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Central Banking Theory and Practice BUSINESS, FINANCE-

CiteScore

2.80

自引率

57.10%

发文量

审稿时长

7 weeks

期刊介绍： Journal of Central Banking Theory and Practice is a scientific journal dedicated to publishing quality papers and disseminating original, relevant and applicable economic research. Scientific and professional papers that are published in the Journal of Central Banking Theory and Practice cover theoretical and practical aspects of central banking, monetary policy, including the supervision issues, as well as banking and management in central banks. The purpose of the journal is to educate the general public about the key issues that the central bankers globally face, as well as about contemporary research and achievements in the field of central banking theory and practice.