Corporate Vulnerability and Bank Stability : Evidence from Jordan

Corporate Vulnerability and Bank Stability : Evidence from Jordan

This paper uses data on publicly listed companies in Jordan to evaluate corporate vulnerability and perform corporate stress testing. The exercise finds that both earnings and interest rate shocks have significant impact on corporate vulnerability. Because different banks have different sector exposures, and different sectors exhibit different vulnerability at different times, the stress tests that include corporate exposure will provide a more precise evaluation of bank soundness.

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Bibliographic Details
Main Author: Love, Inessa
Language:English
Published: 2010-12-01
Subjects:ACCOUNTING, AMORTIZATION, ARREARS, BALANCE SHEET, BANK DEBT, BANK EXPOSURE, BANK EXPOSURES, BANKING SECTOR, BANKRUPTCY, BANKS, BENCHMARKING, BOOK VALUE, CAPITAL ADEQUACY, CASH FLOWS, CORPORATE DEFAULT, CORPORATE DEFAULTS, CREDIT CRUNCHES, CREDIT QUALITY, CREDITOR, CURRENT ASSETS, DEBT, DEBT FINANCING, DEBT LEVELS, DEBT LOADS, DEBT OBLIGATIONS, DEBT RATIO, DEBT RATIOS, DEBTS, DEVELOPMENT POLICY, EXPOSURES, FINANCIAL COMPANIES, FINANCIAL DIFFICULTIES, FINANCIAL DISTRESS, FINANCIAL SECTOR, FINANCIAL SECTORS, FINANCIAL SERVICES, FINANCIAL STATEMENT, FOREIGN INVESTOR, GROWTH RATE, GROWTH RATES, INCOME, INDEBTEDNESS, INFLATION, INFLATION RATES, INTEREST COVERAGE RATIO, INTEREST EXPENSE, INTEREST EXPENSES, INTEREST PAYMENT, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATE SHOCK, INTEREST RATE SHOCKS, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL INVESTORS, INTERNATIONAL STANDARDS, INVENTORIES, INVESTOR INTEREST, LENDING PRACTICES, LEVEL OF DEBT, LIQUID ASSETS, LIQUIDITY, MACROECONOMIC CONDITIONS, MATURITY, MATURITY STRUCTURE, NPL, PRIVATE SECTOR DEVELOPMENT, PRODUCTIVITY, PROFITABILITY, QUICK RATIO, REAL ESTATE, REAL GDP, REAL GROWTH RATES, RETAINED EARNINGS, RETURN, RETURN ON ASSETS, SHORT-TERM DEBT, SHORT-TERM FINANCING, STOCK EXCHANGE, TOTAL DEBT, TRADE CREDIT, TRADE SECTOR, TRADE SECTORS, VALUE OF ASSETS, VOLATILITY, WORKING CAPITAL,
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101213131439
https://hdl.handle.net/10986/3984
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Summary:This paper uses data on publicly listed companies in Jordan to evaluate corporate vulnerability and perform corporate stress testing. The exercise finds that both earnings and interest rate shocks have significant impact on corporate vulnerability. Because different banks have different sector exposures, and different sectors exhibit different vulnerability at different times, the stress tests that include corporate exposure will provide a more precise evaluation of bank soundness.

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