Corporate vulnerability and bank stability: evidence from Jordan

Inessa Love

No 5502, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Debt Markets; Banks&Banking Reform; Access to Finance; Economic Theory&Research; Emerging Markets (search for similar items in EconPapers)
Date: 2010-12-01
New Economics Papers: this item is included in nep-ara and nep-cwa
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