Jordan Banks Financial Soundness Indicators
The aim of this research paper is to examine the Jordanian banks using financial soundness indicators. This is to establish if Jordanian banks were affected because of the 2007/2008 financial crisis and determine the underlying reasons. The research paper was conducted on 25 banks in Jordan listed in the countries securities exchange. The research methodology used consisted of examining the banks financial records in order to derive four crucial Basel III ratio such as the capital adequacy ratio, the leverage ratio, the liquidity ratio and finally the Total Provisions (As % Of Non-Performing Loans) %. The results revealed that out of the four hypotheses under examination Jordan Banks do not meet Basel financial Indicators for Capital Adequacy Ratio, Jordan Banks does not meet Basel financial Indicators for Liquidity Ratio , Jordan Banks do not meet Basel financial Indicators for Leverage Ratio and Jordan Banks do not meet Basel financial Indicators for Total Provisions (As % Of Non-Performing Loans) ratio. Only one hypothesis was accepted based on the research outcomes. The rest of the hypothesis was rejected since the average trend line did not go below the Basel III required ratio level. The general outcome of the research revealed that Jordanian banks were not affected significantly by the financial crisis.
Allen, W. A., & Wood, G. (2006). Defining and achieving financial stability. Journal of Financial Stability, 2(2), 152-172
Barth, J. R., Caprio, G., & Levine, R. (2004). Bank regulation and supervision: what works best?. Journal of Financial intermediation, 13(2), 205-248.
Basel Committee. (2010). Basel III: A global regulatory framework for more resilient banks and banking systems. Basel Committee on Banking Supervision, Basel.
Bateni, L., Vakilifard, H., & Asghari, F. (2014). The Influential Factors on Capital Adequacy Ratio in Iranian Banks. International Journal of Economics and Finance, 6(11), p108.
Keister, T., & Bech, M. L. (2012). On the liquidity coverage ratio and monetary policy implementation. BIS Quarterly Review December.
Basel Committee on Banking Supervision. (2014). Basel III leverage ratio framework and disclosure requirements. [ONLINE] Available at: http://www.bis.org/publ/bcbs270.htm. [Accessed 20 May 2015].
Basel Committee on Banking Supervision. (2013) Revised Basel III leverage ratio framework and disclosure requirements. [ONLINE] Available at: http://www.bis.org/publ/bcbs251.pdf [Accessed 20 May 2015].
Blundell-Wignall, A., & Atkinson, P. (2010). Thinking beyond Basel III. OECD Journal: Financial Market Trends, 2010(1), 9-33.
Chun, S. E., Kim, H., & Ko, W. (2012). The Impact of Strengthened Basel III Banking Regulation on Lending Spreads: Comparisons across Countries and Business Models. BOK Working paper no. 2012-15, Economic Research Institute, The Bank of Korea, http://imer. bok. or. kr, March.
Khamis, M. (2003). Financial Sector Reforms and Issues in Jordan, Central Bank of Jordan, Paper Presented to the Euro-Med Regional Economic Dialogue, Rome.
Jordan Investment Bank (JIB), (2005), Finance and Banking, [online],
(http://www.jordaninvestment.com /2c.htm, retrieved on 3/20/2015).
Lastra, R. M. (2011). Systemic risk, SIFIs and financial stability. Capital Markets Law Journal, kmr009.
Nolle, D. E. (2015). Who's in Charge of Fixing the World's Financial System? The Under‐Appreciated Lead Role of the G20 and the FSB. Financial Markets, Institutions & Instruments, 24(1), 1-82.
Zeitun, R, & Benjelloun, H, (2012) the Efficiency of Banks and Financial Crisis in a Developing Economy: The Case of Jordan. International society of accounting, banking and finance. Vol 4, No.2, pp. 28~60
Schwartz, A. J. (1995). Why Financial Stability Depends on Price Stability. Economic Affairs, 15(4), 21-25.
Stein, J. C. (2011). Monetary policy as financial-stability regulation (No. w16883). National Bureau of Economic Research.
World Bank, (2003). The Hashemite Kingdom of Jordan Country Assistance Evaluation, Report No.26875-JO.
Copyright (c) 2015 International Journal of Finance & Banking Studies (2147-4486)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Authors contributing to IJFBS agree to publish their articles under the Creative Commons Attribution- 4.0 NC license, allowing third parties to share their work (copy, distribute, transmit) and to adapt it, under the condition that the authors are given credit, that the work is not used for commercial purposes, and that in the event of reuse or distribution, the terms of this license are made clear. Authors retain copyright of their work, with first publication rights granted to IJFBS. However, authors are required to transfer copyrights associated with commercial use to the Publisher. The authors agree to the terms of this Copyright Notice, which will apply to this submission if and when it is published by this journal
Submission of an article implies that the work described has not been published previously( exceptin the form of an abstract or as part of a published lecture or academic thesis), that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, it will not be published elsewhere in the same form, in English or in any other languages, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication