World Bank report highlights financial sector stability in Jordan amid regional challenges
(MENAFN) The World Bank’s annual report, “Finance and Prosperity,” has confirmed the stability and resilience of Jordan’s financial and banking sector, positioning it as relatively safe from financial risks compared to many other countries in the Middle East and North Africa. The report, as detailed by the Jordanian newspaper "Al-Ghad," indicates that Jordan is classified among the nations facing low to moderate financial risks over the coming 12 months. It ranks Jordan within the 35 least vulnerable countries out of 50 emerging and developing economies assessed for their financial stability.
The “Finance and Prosperity” report examines developments in the financial sector, particularly focusing on vulnerabilities in low- and middle-income countries. It highlights that most banks in emerging and developing markets are well-equipped with buffers to manage significant credit shocks and sovereign risks. Nonetheless, some banks in low-income markets may encounter capital shortfalls if faced with a notable but manageable increase in non-performing loans.
Additionally, the report underscores the major challenges faced by emerging markets and developing economies in addressing financing gaps related to low-carbon investments that are resilient to climate change. To mitigate these risks, the report recommends strengthening banking reserves ahead of potential crises, implementing robust financial safety nets, and conducting stress tests. It also advocates for the development of comprehensive crisis management mechanisms, full-capacity emergency liquidity assistance, strong frameworks for resolving banking issues, and well-funded deposit insurance systems to minimize financial stress and its broader economic impacts.
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