Financial Crises and Their Impact on Financial Market Stability: An Analytical Study of the Jordanian Financial Market (2004–2023)

Abstract

      The current research aims to determine the impact of financial crises on the stability of financial markets. To achieve the study's objectives, a descriptive-analytical approach was employed, reviewing published reports and studies on the Jordanian financial market, as well as reports and publications from the Central Bank of Jordan, the Jordan Securities Commission, and the Association of Banks in Jordan.
A regression model analysis was also conducted. The results showed that financial crises have a negative impact on Jordan's GDP, slowing the growth of per capita GDP. Supply chains were disrupted during the COVID-19 pandemic, leading to a decrease in demand for Jordanian exports. Financial crises also had a significant negative impact on Jordan's external debt ratio, increasing it to a certain level. Furthermore, financial crises negatively affected interest rates in Jordan, impacting capital flows and investor confidence. Finally, the results demonstrated that trading volume in the Jordanian financial market was directly affected by global and regional financial crises, declining during these crises due to decreased confidence among both local and foreign investors. The study recommended the need to conduct further studies on the impact of financial crises and their effect on the stability of financial markets in neighboring countries and the Jordanian financial market, and to make a comparison between them.