Impact of Risk on the Degree of Banking Safety in Traditional Jordanian Banks

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Dr. Ghazi Abdulmajeed Alrgaibat
Dr. Ghazi Abdulmajeed Alrgaibat
σ
Mohannad Mohammed Al Ajlouni
Mohannad Mohammed Al Ajlouni
ρ
Dr. Ghazi Abdul Majeed Alrgaibat
Dr. Ghazi Abdul Majeed Alrgaibat
α Al al-Bayt University

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Impact of Risk on the Degree of Banking Safety in Traditional Jordanian Banks

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Abstract

This study aimed to measure the impact of banking risk which represented “liquidity risk, credit risk, and interest rate risk” on the degree of safety for traditional (commercial) Jordanian banks. A sample of Jordanian traditional banks was used during the period (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011).The methodology which used to analyze the impact of banking risks on the degree of safety in commercial banks is the multiple linear regression. The study hypotheses were tested independently for each type of risk. The results showed a statistically significant relationship between bank risk and the degree of safety for Jordanian commercial banks. The study recommended that the risk management should be subject to a continuous surveillance by the management, with focus on credit risk. Also, sources and usages of funds should be identified and determined, considering the main targets for banks. ( I.e. liquidity, profitability and safety). Developing appropriate mechanisms to deal with the bank risk, the statement of seriousness on banks and continues development of regulatory controls are also recommended.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Dr. Ghazi Abdulmajeed Alrgaibat. 2014. \u201cImpact of Risk on the Degree of Banking Safety in Traditional Jordanian Banks\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 14 (GJMBR Volume 14 Issue C3): .

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GJMBR Volume 14 Issue C3
Pg. 29- 36
Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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v1.2

Issue date

July 7, 2014

Language
en
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This study aimed to measure the impact of banking risk which represented “liquidity risk, credit risk, and interest rate risk” on the degree of safety for traditional (commercial) Jordanian banks. A sample of Jordanian traditional banks was used during the period (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011).The methodology which used to analyze the impact of banking risks on the degree of safety in commercial banks is the multiple linear regression. The study hypotheses were tested independently for each type of risk. The results showed a statistically significant relationship between bank risk and the degree of safety for Jordanian commercial banks. The study recommended that the risk management should be subject to a continuous surveillance by the management, with focus on credit risk. Also, sources and usages of funds should be identified and determined, considering the main targets for banks. ( I.e. liquidity, profitability and safety). Developing appropriate mechanisms to deal with the bank risk, the statement of seriousness on banks and continues development of regulatory controls are also recommended.

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Impact of Risk on the Degree of Banking Safety in Traditional Jordanian Banks

Mohannad Mohammed Al Ajlouni
Mohannad Mohammed Al Ajlouni
Dr. Ghazi Abdul Majeed Alrgaibat
Dr. Ghazi Abdul Majeed Alrgaibat

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