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Middle East and Central Asia > Jordan

You are looking at 1 - 5 of 5 items for :

  • Type: Journal Issue x
  • Financial regulation and supervision x
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Cover High-Level Summary Technical Assistance Reports
Developing Supervisory Review and Evaluation Process SRP Framework
Nehmat H Hantas
and
Sebastien Clanet
The International Monetary Fund (IMF)’s Middle East Regional Technical Assistance Center (METAC) is currently assisting the Central Bank of Jordan (CBJ) in enhancing its risk-based supervision through the development of a Supervisory Review and Evaluation SRP framework inspired from European Central Bank (ECB) methodology. The Technical Assistance (TA) mission is part of a multi-step medium-term project. The TA mission aimed to design, in coordination with CBJ, a progressive multi-step roadmap defining the major milestones for a full implementation of SRP. The mission noted that several dimensions should be taken into consideration when implementing the SRP, most notably bridging the data gap by building a fully-fledged supervisory risk database through a dedicated IT project, assessing whether the current organization of the Banking Supervisory Department should be adjusted, and progressively cover all material sources of risks in the SRP.
Keywords:
Central Bank; Banking Supervision; Risk-based Supervision; Supervisory Review Process; Roadmap; Milestones; evaluation process SRP framework; TA mission; SRP approach; SRP assessment; capacity development recipient
Cover Technical Assistance Reports
Jordan: Technical Assistance Report-Developing Supervisory Review and Evaluation Process SRP Framework
International Monetary Fund. Middle East and Central Asia Dept.
The International Monetary Fund (IMF)’s Middle East Regional Technical Assistance Center (METAC) is currently assisting the Central Bank of Jordan (CBJ) in enhancing its risk-based supervision through the development of a Supervisory Review and Evaluation SRP framework inspired from European Central Bank (ECB) methodology. The Technical Assistance TA mission is part of a multi-step medium-term project. The TA mission aimed to design, in coordination with CBJ, a progressive multi-step roadmap defining the major milestones for a full implementation of SRP. The mission noted that several dimensions should be taken into consideration when implementing the SRP, most notably bridging the data gap by building a fully-fledged supervisory risk database through a dedicated IT project, assessing whether the current organization of the Banking Supervisory Department should be adjusted, and progressively cover all material sources of risks in the SRP.
Keywords:
evaluation process SRP framework; SRP framework; CBJ's supervision staff; SRP approach; IMF's Monetary; Bank supervision; Commercial banks; Risk-based supervision; Credit risk; Global
Cover IMF Working Papers
FinTech in Financial Inclusion: Machine Learning Applications in Assessing Credit Risk
Majid Bazarbash
Recent advances in digital technology and big data have allowed FinTech (financial technology) lending to emerge as a potentially promising solution to reduce the cost of credit and increase financial inclusion. However, machine learning (ML) methods that lie at the heart of FinTech credit have remained largely a black box for the nontechnical audience. This paper contributes to the literature by discussing potential strengths and weaknesses of ML-based credit assessment through (1) presenting core ideas and the most common techniques in ML for the nontechnical audience; and (2) discussing the fundamental challenges in credit risk analysis. FinTech credit has the potential to enhance financial inclusion and outperform traditional credit scoring by (1) leveraging nontraditional data sources to improve the assessment of the borrower’s track record; (2) appraising collateral value; (3) forecasting income prospects; and (4) predicting changes in general conditions. However, because of the central role of data in ML-based analysis, data relevance should be ensured, especially in situations when a deep structural change occurs, when borrowers could counterfeit certain indicators, and when agency problems arising from information asymmetry could not be resolved. To avoid digital financial exclusion and redlining, variables that trigger discrimination should not be used to assess credit rating.
Keywords:
WP; ML model; bears risk; machine learning technique; ML analysis; ML evaluation; FinTech Credit; Financial Inclusion; Machine Learning; Credit Risk Assessment; ML analyst; credit risk driver; FinTech credit company; credit scoring; supervised machine learning model; capital structure; borrower default; neural network; Credit risk; Credit; Credit ratings; Loans; Global
Cover Policy Papers
Ensuring Financial Stability in Countries with Islamic Banking
International Monetary Fund
This paper discusses the need for ensuring financial stability in countries with Islamic Banking (IB). IB continues to grow rapidly, in size and complexity, posing a challenge to supervisory authorities and central banks. The legal environment within which IBs operate can be complex and challenging and may have implications for financial stability. IBs operate in diverse legal environments, some of which are more evolved than others in providing strong legal underpinnings for IB. International governance standards apply to IB but need to be customized to consider IBs’ distinct governance features. Significant progress has been achieved in developing prudential standards for IB, although broader implementation and more consistent application are needed. Progress has been slow in developing IB’s liquidity management and money markets. In recent years, hybrid financial products in IB have emerged that replicate aspects of conventional finance in an IB context, raising financial stability concerns. The IMF has played an important role in promoting financial stability in IB jurisdictions, working closely with IB standard setters, and international organization to shape IB standards and promote best practices.
Keywords:
PP; IB jurisdiction; balance sheet; IB industry; IB operation; IB practice; IB product; IB service; IB depositor; IB activity; IB products; IB governance; IBS stability; Islamic banking; Legal support in revenue administration; Deposit insurance; Capital adequacy requirements; Global; Middle East; East Asia; Central Asia; Sub-Saharan Africa
Cover IMF Working Papers
Basel Capital Requirements and Credit Crunch in the MENA Region
Samy Ben Naceur
and
Ms. Magda E. Kandil
The 1988 Basel I Accord set the common requirements of bank capital to promote the soundness and stability of the international banking system. The agreement required banks to hold capital in proportion to their perceived credit risks, and this requirement may have caused a “credit crunch,” a significant reduction in the supply of credit. We investigate the direct link between the implementation of the Basel I Accord and lending activities, using a data set spanning annual observations covering 1989–2004 for banks in Egypt, Jordan, Lebanon, Morocco, and Tunisia. The results provide clear support for a significant increase in credit growth following the implementation of capital regulations, in general. Despite higher capital adequacy ratios, banks expanded credit and asset growth. Credit growth appears to be driven by demand fluctuations attributed to real growth, cost of borrowing, and exchange rate risk. Overall, the effects of macroeconomic variables, in contrast to capital adequacy, appear to be more dominant in determining credit growth, regardless of the capital adequacy ratio, and regardless of variation across banks by nationality, ownership, and listing.
Keywords:
WP; capital regulation; government securities; banking sector; interest rate; capital requirement; credit crunch; Basel I Accord; lending behaviour; panel data models; bank regulator; investment strategy; bank shrinkage; bank-borrower relationship; bank portfolio; bank capital; loan-asset ratio; capital base; banks' holding; bank capital requirement; Capital adequacy requirements; Credit; Commercial banks; Loans; Basel Core Principles; Middle East; North Africa; East Africa