Fiscal Year 2025
Capacity Development Activities
Financial Supervision and Regulation
Developing regulation on Interest Rate Risk in the Banking Book (IRRBB)
The project started on 13-17 October with a workshop aiming to build supervisors’ knowledge on the topic to help the Central Bank of Jordan (CBJ) to develop the regulation recommended by Jordan’s Financial System Stability Assessment FSAP report, issued in April 2023. The workshop covered the key concepts of the Interest Rate Risk in the Banking Book (IRRBB) and presented the measurement approaches. It also presented the Basel Committee’s principles for banks and the supervisor on interest rate risk and discussed its integration in the Supervisory Review Process and its impact on capital surcharge. The mission agreed with the CBJ to produce a first draft of IRRBB regulation that METAC will review in a prospective mission in early FY26. This will help strengthen banks’ management and supervisory assessment of interest rate risk which became a supervisory priority amid a higher interest rate environment.
Developing SRP Risk Rating Methodology for Banks
METAC continued with the CBJ the multi-step medium-term project on developing SRP risk rating methodology for banks, which will be conducted virtually until the end of fiscal year 2025. The virtual activity will be followed by an in-person mission in early FY26 to finalize the overall SRP architecture, the various building blocks and launch the testing process. During October 20-30, METAC reviewed the first two chapters of the rating methodology (i) SRP overall architecture and (ii) credit risk. Other chapters on liquidity, operational risk, internal control and governance, profitability and business model, and market risk will follow in the coming months. The completion of this multi-step project will support the CBJ supervisory approach to move towards Risk-based Supervision, which will help address some of the FSAP report’s recommendations on banking supervision.
Real Sector Statistics
Improving quarterly GDP estimates and using administrative source data in National Accounts compilation
In response to a request from the Department of Statistics of Jordan, a METAC mission assisted the national accounts staff on improving the quarterly GDP estimates and in using administrative source data in national accounts compilation during 20-31 October. In addition, the mission provided guidance on the backcasting methods for the implementation of International Standard Industrial Classification of all Economic Activities (ISIC) Rev 4 in the quarterly GDP estimates, series 2008-2024.