The recent global financial crisis in 2008 highlighted the importance of the safety of the banking sector and the continuous assessment of its risks, which is positively reflected on financial and economic stability, as the banking sector plays a key role in the economy by providing liquidity needs to finance various economic activities in a way that enhances economic growth. The financial positions of a large number of banks at the beginning of the crisis were stable in the United States of America, but the failure of Lehman Brothers led to the collapse of other banks one by one due to the contagion risks, and even beyond the borders of the United States of America, which put the entire global financial system at risk. Which inflicted heavy losses on the economies of countries for many years, this reinforced the conviction of the supervisory authorities that the stability of both the financial and economic systems is achieved only if the financial and economic risks (side by side) are taken into account when making decisions in economic and prudential policies. The importance of the banking sector in the Arab countries is highlighted through its vital role in providing the national economy with the necessary liquidity for various economic activities. The average size of the banking sector's assets to the total assets of the financial sector in the Arab countries at the end of 2020 was about 94 percent. In addition, the banking sector in the Arab countries is considered large in size when compared to the GDP. The size of the assets of this sector at the end of 2020, amounted to about 3.8 trillion dollars (142 percent of the GDP of all Arab countries), which it clarifies the importance of enhancing the strength of this sector, which will reflect positively on the economic and financial stability in the Arab countries, especially that this sector faced many challenges and risks resulting from regional and global conditions and changes and generated pressures on its liquidity, and an increase in credit, operational and market risks. For example, the COVID19 pandemic posed a challenge to financial stability, Central banks strived to balance when promoting financial stability. on one hand actions needed to protect the financial sector, and those actions needed to protect the private sector, especially small and medium-sized enterprises. Despite the severity of the impact of the Corona virus crisis, and as a result of the efforts of Arab central banks, and the adoption of most Arab countries with the requirements of Basel III and IFRS 9, the financial soundness indicators (FSIs) in the Arab banking sector have achieved good results. The banking sector in Arab countries is resilient and able to absorb financial shocks, despite the challenges and risks faced by the banking sector in the Arab countries as a result of the emerging Corona virus crisis, the FSIs showed that the sector with strong and stable financial positions enabled it to withstand the shock of the Corona pandemic and other challenges, the banking sector in the Arab countries was distinguished by its solvency which is higher than those targeted internationally according to Basel Ⅲ standard of 10.5 percent, which indicates that the Arab banking sector enjoys high solvency and enhances its ability to absorb any potential losses. The banking sector in the Arab countries has also maintained good levels of loan provisions due to the implementation of the International Financial Reporting Standard (IFRS9) by many Arab countries, which has led to enhancing the strength and solvency of banks, hedge against potential shocks, and improve the quality of the assets of this sector. In this context, the Arab Monetary Fund launched this initiative with the aim of supporting the great efforts made by central banks in enhancing the resilience of the banking sector that keeps pace with international best practices and in accordance with the best international standards. The rules of sound banking work will lead to enhancing the ability of the Arab banking sector to absorb financial shocks in general, and most central banks in the Arab countries have been applying the requirements of Basel III and International Financial Reporting Standard No. (9), which will reflect positively on the FSIs of the banking sector and will enhance the ability of the banking sector to absorb the potential shocks and improve the quality of the assets of this sector.