Jordan: Technical Assistance Report-Developing Supervisory Review and Evaluation Process SRP Framework

Technical Assistance Reports, March 15, 2024

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Canonical URL: Jordan: Technical Assistance Report-Developing Supervisory Review and Evaluation Process SRP Framework

The International Monetary Fund (IMF)’s Middle East Regional Technical Assistance Center (METAC) is assisting the Central Bank of Jordan (CBJ) in enhancing its risk-based supervision through development of a Supervisory Review and Evaluation SRP framework inspired from European Central Bank (ECB) methodology.
The Technical Assistance TA mission is part of a multi-step medium-term project.
The TA mission aimed to design, in coordination with CBJ, a progressive multi-step roadmap defining the major milestones for a full implementation of SRP.
The mission noted several dimensions to consider when implementing the SRP, most notably:
- bridging the data gap by building a fully-fledged supervisory risk database through a dedicated IT project;
- assessing whether the current organization of the Banking Supervisory Department should be adjusted;
- progressively covering all material sources of risks in the SRP.

The SRP framework should be inspired by ECB methodology.
Implementation requires a progressive multi-step roadmap with clearly defined milestones.
A critical constraint is the existing data gap; a dedicated IT project to build a supervisory risk database is necessary.
Organizational assessment of the Banking Supervisory Department is required to determine adjustments for effective SRP implementation.
The SRP should progressively cover all material sources of risks.

Design and adopt a progressive multi-step roadmap for full SRP implementation.
Develop a dedicated IT project to build a fully-fledged supervisory risk database to bridge the data gap.
Assess and, if necessary, adjust the organization of the Banking Supervisory Department to support SRP.
Ensure the SRP progressively covers all material sources of risks, consistent with ECB-inspired methodology.