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Growing Science » Uncertain Supply Chain Management » The impact of liquidity risk, credit risk, and operational risk on financial stability in conventional banks in Jordan

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Uncertain Supply Chain Management

ISSN 2291-6830 (Online) - ISSN 2291-6822 (Print)
Quarterly Publication
Volume 11 Issue 2 pp. 433-442 , 2023

The impact of liquidity risk, credit risk, and operational risk on financial stability in conventional banks in Jordan Pages 433-442 Right click to download the paper Download PDF

Authors: Sawsan Ismail, Emad Ahmed

DOI: 10.5267/j.uscm.2023.3.006

Keywords: Unsystematic financial risk, Liquidity risk, Credit risk, Operational risk, Financial stability, Conventional banks, Jordan

Abstract: This study examines the impact of unsystematic financial risk, including liquidity risk, credit risk, and operational risk, on financial stability in conventional banks listed on the Amman Stock Exchange in Jordan. Understanding and managing these risks is crucial for protecting investors, maintaining financial stability, encouraging foreign investment, and strengthening the financial sector in Jordan. The study adopts a descriptive approach to collect and describe data and utilizes cross-sectional panel data over five years from 2016 to 2021 to establish cause-and-effect relationships between study variables, while controlling for other relevant factors that may influence the relationship. The findings suggest that while liquidity risk may not directly impact financial stability, it remains a critical risk factor that requires attention in risk management strategies. Credit risk has a negative impact on financial stability, highlighting the importance of effective credit risk management strategies to maintain a stable financial system. The study finds that operational risk has no direct impact on financial stability. Still, unsystematic operational risks can have significant implications for individual financial institutions and may indirectly affect overall stability. The study underscores the importance of comprehensive risk management strategies to mitigate the negative impact of unsystematic financial risk on financial stability. Future research may consider analyzing the impact of other types of risks on financial stability.

How to cite this paper
Ismail, S & Ahmed, E. (2023). The impact of liquidity risk, credit risk, and operational risk on financial stability in conventional banks in Jordan.Uncertain Supply Chain Management, 11(2), 433-442.

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Journal: Uncertain Supply Chain Management | Year: 2023 | Volume: 11 | Issue: 2 | Views: 3245 | Reviews: 0

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