Al-Salem: The stability of the banking sector was a crucial element in achieving overall economic stability in Jordan.

Al-Salem: Jordanian banks demonstrated significant resilience in facing economic shocks, supported by effective central bank policies.

Sharkas affirms the soundness of the economic approach in Jordan.

Sharkas: Jordan managed to maintain its economic stability despite challenges.

Sharkas emphasizes the importance of reforms in enhancing Jordan’s ability to deal with global crises.

Tzannatos: Jordan is considered a successful economic navigation model through crises.

Tzannatos: Jordan succeeded in achieving a “soft landing” after the COVID-19 pandemic.

Theofilou: Economies in the G20 are expected to experience a slowdown this year compared to the previous year.

Nemeh discusses the future of the banking sector amid digital transformations and new challenges

On Saturday morning, the Association of Banks in Jordan held the Jordanian Banking Summit for the year 2024, under the patronage of Dr. Adel Sharkas, the Governor of the Central Bank. The event was attended by Mr. Basem Khalil Al-Salem, the Chairman of the Association of Banks, and saw the participation of chairpersons of boards and general managers from various banks in the Kingdom.

At the beginning of the opening session, Mr. Al-Salem delivered a welcoming speech, shedding light on the achievements and challenges in the banking sector and the Jordanian economy.

Al-Salem commenced his speech by expressing deep gratitude to the Governor of the Central Bank for his endorsement of the summit, praising the pivotal role played by the Central Bank in supporting and developing the Jordanian banking sector.

He also addressed the significant challenges faced by the global and regional economies and how these challenges have impacted Jordan.

Despite these difficulties, he emphasized the positive results achieved by the Jordanian economy, pointing to the economic growth rate, improvement in the balance of payments, and the stability in inflation rates.

He highlighted the crucial role played by the banking sector in these successes, considering the stability of the banking sector as a fundamental element in achieving overall economic stability.

He added that Jordanian banks have demonstrated significant resilience in facing economic shocks, supported by effective central bank policies and robust financial oversight.”

He also spoke about the growing role of technology in the banking sector, emphasizing the importance of adopting technological innovations to enhance the efficiency of banking services and improve the customer experience.

Al-Salem highlighted the importance of digital banking services and their impact on promoting financial inclusion, especially for youth and women.

In conclusion of his speech, Al-Salem noted the future plans for the banking sector, pointing to ambitious programs aimed at improving the economic performance of the Kingdom and enhancing its position on the international stage.

He expressed hope that this summit would contribute to opening new horizons for collaboration and innovation, ensuring the continued growth and prosperity of the Jordanian economy.

In turn, Dr. Adel Sharkas, the Governor of the Central Bank, affirmed the sound economic approach in Jordan and the significant achievements of the financial and banking sector in the country.

Dr. Sharkas touched upon the strong infrastructure and the stimulating regulatory framework for innovation and development in the banking sector, noting that these factors are a fundamental pillar for financial and monetary stability in the country.

Dr. Sharkas praised the exemplary partnership between the Central Bank and the Association of Banks, emphasizing the importance of such partnerships in supporting banking and economic growth.

He also expressed his gratitude and appreciation to the Association of Banks for its significant efforts in organizing the summit and supporting the banking sector.

In his analysis of the global economic situation and its impact on Jordan, Dr. Sharkas discussed the challenges faced by the global economy, including the rise in inflation rates in the past two years.

He highlighted that Jordan managed to maintain its economic stability despite these challenges, commending the monetary policies adopted by the Central Bank and the commitment of banks to international standards and professional banking conduct.

He also addressed the economic reforms accomplished in Jordan, which enhanced financial stability and led the country to embark on a new economic reform program for 2024.

Dr. Sharkas pointed out the significance of these reforms in strengthening Jordan’s ability to cope with global crises, such as the war on Gaza and its economic repercussions.

He emphasized the vital role of the Central Bank in maintaining monetary stability, highlighting efforts in risk management and adherence to international standards.

Dr. Sharkas commended the positive evaluations received by Jordan from international rating agencies, reflecting confidence in the Jordanian economy’s ability to recover and grow.

He acknowledged the ongoing efforts to develop the banking and financial sector in Jordan, emphasizing the importance of innovation and adopting new strategies, such as green finance, to ensure a sustainable and robust financial future for the Kingdom.

He also spoke about the significant economic reforms that have been implemented, contributing to Jordan’s economic stability in the face of global challenges, such as rising inflation rates and changes in global monetary policy.

He emphasized the importance of monetary stability and the Central Bank’s commitment to supporting the exchange rate of the Jordanian Dinar and preserving foreign reserves.

He discussed the geopolitical and economic challenges facing Jordan, noting the efforts made to address these challenges, including the economic impact of events in Gaza and developments in the Red Sea.

Dr. Sharkas also addressed the economic growth in Jordan, highlighting the impact of the COVID-19 pandemic and how the Jordanian economy managed to achieve positive growth rates in the subsequent years.

He noted an increase in the number of tourists and Jordanian exports, reflecting increased economic activity and a strong recovery after the pandemic.

He praised the role of the Central Bank in achieving monetary and financial stability, highlighting important aspects such as the green financing strategy as a leading initiative in the region to support environmental sustainability.

In conclusion, he reaffirmed Jordan’s commitment to implementing economic reforms and effective collaboration with international partners, expressing optimism about a sustainable and robust financial future for the Kingdom

In turn, the economic expert Prof. Zafiris Tzannatos stated that Jordan is considered a model for successful economic navigation through crises.

He praised how Jordan dealt with a series of global and local crises, especially amid the war in Ukraine and crises related to food and fuel.

Tzannatos mentioned that Jordan succeeded in achieving a ‘soft landing’ after the COVID-19 pandemic, considering it a significant achievement.

In his analysis of the economic situation, Tzannatos emphasized the importance of understanding the underlying dynamics of national economies, noting that the banking sector cannot be separated from the overall economy.

He reviewed in his session, which covered four different parts, starting from the international framework and economic theory, and ending with the current economic situation in Jordan

He confirmed that the real economy grows at a rate corresponding to the increase in its inputs, including capital, labor, technology, and artificial intelligence.

Tzannatos explained that real growth in Gross Domestic Product (GDP) depends on population growth and their productivity, which includes the productivity of capital and technology.

He concluded that despite the difficulty of predicting the future, the lessons learned from the history of the global economy provide valuable insights into how to move towards growth and stability.

In turn, the financial expert Christos Theofilou delivered a session addressing the expectations for the global and regional banking systems in the upcoming period.

He discussed his expectations for the global banking system, noting that it faces some challenges due to the changing economic conditions.

He mentioned that banks in some of the world’s largest economies, such as North America and China, will encounter more challenging economic conditions in the next eighteen months.

On the regional side, Theofilou pointed out that the Gulf Cooperation Council (GCC) region enjoys stable expectations, while North Africa is viewed with negative expectations. He added that Jordanian banks have their own expectations, which he will delve into during his presentation.

Theofilou discussed the evolution of credit trends over the next 12 to 18 months, emphasizing that challenging economic conditions in some major economies will lead to a fundamental weakening of the financial foundations of most global banks.

However, he anticipated that government support and capital inflows would remain generally stable.

Theofilou concluded his remarks by noting that economies in the G20 are expected to experience a slowdown this year compared to the previous year, due to high-interest rate policies and tight monetary policies in advanced economies, along with slower economic growth in China.

In a comprehensive analysis of recent developments in the banking sector, banking expert Bassem Nemeh discussed the challenges facing banks in the digital age and information exchange.

He pointed out that deposits have become less “stable” due to digital accessibility and the interconnected behavior of depositors.

Nemeh addressed the question of how to build trust in relationship-based banking in the post-crisis market structure. He discussed the possibility of the sector moving towards consolidation and tightening, citing experiences in 2023 and new regulations.

The banking expert highlighted the divergent trends between the United States and Europe, emphasizing the shift towards “narrower” banking models and the regulatory differences impacting the sector.

Nemeh reviewed recent developments indicating a shift towards narrow banking models, such as the use of reverse repo operations and money market funds in the United States, and the growing importance of private credit funds globally.

He concluded by pointing out that the banking sector still relies on trust, mentioning the small banking crisis in early 2023 and the role of digitization in accelerating withdrawal processes.

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