Risks, Bank Concentration and their Impact on Stability in Jordanian Commercial Banks

Omar Khlaif Gharaibeh, Buthiena Kharabsheh and Khaldoon Ahmad Al Daoud

Academic Journal of Interdisciplinary Studies, 2022, vol. 11

Abstract: The aim of this paper is to examine the effect of risks and financial concentration on the stability of Jordanian commercial banks based on annual data from 2012-2019. Using panel data based on the pooled effects model, the results indicate that funding risk and concentration are positively and statistically significant affects the stability, while credit risk and profitability have a negative and statistically significant impact on the bank's stability. Stability of Jordanian commercial banks is negatively affected by liquidity risk and size but they are not statistically significant. The study recommends bank managers to improve funding risks through the use of greater financing for deposits, which has a positive impact on increasing bank stability, while the credit standards have to be high quality because they reduce the risks of instability. Finally, managers have to make a balance between profitability and the stability of banks.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:bjz:ajisjr:2298

DOI: 10.36941/ajis-2022-0137

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