The effect of monetary shocks on the financial stability index of the banking sector in Jordan for the period (2007-2021 )

Abstract

Most developing countries are exposed to many different crises and shocks, and Jordan is one of the developing countries that depend on foreign aid, and this exposes them to internal and external shocks, especially monetary shocks of all kinds (money supply shocks, monetary demand shocks, exchange rate shocks, price shocks). interest) and its impact on the financial stability of the banking sector (which shows the ability of the financial system to face risks), especially since the Jordanian economy is weak in economic resources. The study concluded that Jordan's banking sector is vulnerable to many monetary shocks, the most important of which is credit shocks, meaning that exposure to monetary shocks restricts the work of banks in granting credit to investors. Therefore, the Central Bank of Jordan should go to strengthening the local liquidity to face monetary shocks, as well as using studies and modern methods to deal with various shocks