CBJ's Governor Umayya Touqan said the latest regulations are intended to secure the banking sector from future shortcomings. All indications show the financial system in Jordan remains both active and solid, although the recent scandal has revealed many breaches in the banking sector.

Economists praised the CBJ's regulations, saying the banking sector has needed such improvement for a long time. "These regulations are normal and needed to help affected banks eliminate the bad loans they granted for the accused people," said economist Ahmed Al Namri.

Bankers and economists estimate the loans provided to the businessman remain unsecured at some JD 100 million. The remaining portions loaned are covered by collateral.

Since disclosure in the second week of February, the Security Prosecution has held intensive investigations and detained suspected associates in the case. Former ministers, the former chief of the General Intelligence Dept and a number of businessmen were all questioned and at this point appear to be involved.

Touqan has explained how the Central Bank has been working closely with the government to make sure all involved banks in the affair will not fall short in fulfilling their liabilities. Only three banks were involved in the affair: the Finance and Exports Bank, Jordan Al Ahli Bank, and the Jordan-Gulf Bank. While the first has already raised its capital to JD 30 million, the other two are working to obtain a similar direction. Sources at Al Ahli Bank said they are looking for strategic partners to increase the bank's capital to some JD 60 million-JD 18 million more than the current. The Jordan-Gulf Bank situation appears a bit more complicated.

While the Jordan-Gulf Bank has a projected capital worth JD 40 million, its physical capital is JD 5 million less due to the scandal. Imad Al Hajji, the bank's general director, said the bank is doing fine and looking forward to increasing its capital and thereby fortifying the bank's financial standing.

"The banking sector needs an efficient monitoring system to enable each local bank to work in a secured and profitable manner," Al Namri explained.

His Majesty King Abdallah has called for more transparency in the Kingdom's economy. Many economists today believe such calls are not yet being translated into actions on the ground. But economist Yousef Mansour believes the Jordanian economy will not be harmed by the impact of the scandal, which he called "minor blemish."

"You can't judge the performance of the economy by such a blemish," he told The Star. "Transparency should be apparent in all sectors, not simply banking. And the banking sector should deal with this principle with more maturity."

He believes the banking sector needs to disclose its transactions to help the economy over the long run. Such disclosures, says Mansour, would prevent people from fomenting negative speculations about the economy.

"I strongly understand the credit bureau system is a must for local banks, making it easier for all banks to share data about all the businessmen and trade dealers in the Kingdom," stressed Mansour. He added Jordan's Credit Law is still not effective since its endorsement two years ago-a fact which delays better performance for local banks. "If a strong, efficient credit law was effective in the first place the Al Shamayleh conspiracy would never have happened."

But economists warn the current investigations into the case may focus only on the size of the punishment rather than the accessibility of those who behind it. They point to the recent releases of former GID Chief Sameeh Al Batikhi and businessman Munther Halaseh, now out on bail. While Al Batikhi was released on JD 2 million on bail, Halaseh, Al Shalmayleh's closest associate, paid JD 6 million. And Tuesday the State Security Court approved the freeing of Jordanian rally driver Ma'rouf Abu Samra on JD 1 million bail.

Mansour emphasized a need for the Jordanian justice system to be careful and efficient in its handling of the case. He said Al Batikhi should not have been given bail since he was the primary accomplice, and remains an alleged criminal.

Al Shamayleh and Halaseh would not have had access without help from those who used to affiliate with the security and banking systems. The CBJ has therefore issued a new regulation imposing fines on local banks that provide loans without adequate collateral. "These fines are good only to deter those who wish to break the law from doing so in future," said Al Namri. "However, the Central Bank should focus more on the proficiency of banking management, where every bank management can deal with such cases in a more dynamic and perceptive manner."

Al Namri stressed the Central Bank must follow the latest regulations with new ones with pledges for proficient, management-oriented human resources that help the banking sector grow steadily in the future. "How can a bank serve businesses if it fails to qualify its personnel?" wondered Al Namri. "Fines and punishment should come together within the same system," answered Mansour.