The Financial Stability Department at the Central Bank of Jordan is a fairly newly established department, where it was established in 2013. The establishment of this department aims at enhancing the stability of the financial system through identifying and monitoring the risks it may face at the macro- level (systemic risks) to curb them and enhance the ability of the financial system to withstand them. Since one of the lessons learnt from the global financial crisis is that financial stability at the micro level of the banking system is insufficient to achieve financial stability at the macro level because of the so-called systemic risks that hit the whole financial system. This is the reason behind the importance of the macro-prudential policy that aims at mitigating the systemic risk and enhancing the resilience of the financial system to withstand shocks and address imbalances in order not to negatively impact the financial intermediation process to help allocate savings to finance feasible investment opportunities.
Overall Objective: To support Jordan in enhancing its standards for maintaining financial stability, by strengthening the capacities of Central Bank of Jordan through Financial Stability Department.
Project purpose: To develop a comprehensive macro-prudential framework covering all aspects of financial stability in accordance with the European Union standards and best practices.