Stability of banking sector ranks 2nd globally — JSF

(File photo: Ameer Khalifeh/Jordan News)
AMMAN — Jordan has the second-most stable banking sector in the world, behind only Luxembourg, according to a policy paper by the Jordan Strategy Forum (JSF), which cited data from the International Monetary Fund (IMF). اضافة اعلان

The IMF uses what is known as a “z-score” to calculate the probability of a banking system defaulting. The z-score compares a country’s capitalization and returns with the volatility of those returns, Al-Mamlaka TV reported.

Banking plays a major role in the Jordanian economy — among the companies listed on the Amman Stock Exchange, banks account for 61.7 percent of tax revenue and 50.5 of total market capitalization, the paper said.

Jordan’s performance on the IMF’s Financial Development Index has declined over the past four decades, falling from the top Arab country in 1980 to the ninth in 2020. However, the paper pointed out that this decline was due to financial markets rather than financial institutions; Jordan’s score on the financial institutions axis saw an increase over the same period.

The paper was published on the occasion of the UN’s International Banking Day, which falls on December 4 every year.

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