Moroccan Banks Enhance International Cooperation and Crisis Management
In a bid to strengthen its presence in the international financial landscape, Moroccan banks have been working closely with regulatory authorities in host countries where they operate. The Bank Al-Maghrib (BAM), Morocco’s central bank, has signed cooperation agreements with most supervisory authorities of these countries to ensure enhanced supervision and crisis management.
Enhanced Supervision
Under these agreements, BAM shares information on a quarterly basis with its foreign counterparts, particularly those in the West African Economic and Monetary Union (WAEMU) zone. This exchange of data helps provide better insight into the operations of Moroccan banking groups and their subsidiaries.
Crisis Management
To further enhance cooperation, supervisory colleges have been set up for Moroccan banking groups with a foreign presence. These annual meetings bring together representatives from BAM, the host country’s regulatory authority, and the banking group concerned, allowing for a review of the financial and prudential position of the group and its subsidiaries.
Memoranda of Understanding
In addition to these initiatives, BAM has introduced a new generation of Memorandum of Understanding (MOU) with countries such as Madagascar and Djibouti. These MOUs take into account new international standards and practices, ensuring that cooperation between regulators is more effective than ever before.
Crisis Management Tools
When it comes to crisis management, Moroccan banks are well-prepared. The BAM has a range of tools at its disposal to address difficulties in credit institutions, including:
- Formal notices
- Cautions
- Injunctions
- Appointment of interim administrators
Crisis Committee and Systemic Risk Supervision
In the event of a financial crisis, the Crisis Committee, chaired by the Minister of Finance, is responsible for coordinating the actions of constituent authorities. While two crisis simulation exercises have been conducted in 2009 and 2014, the effectiveness of the committee’s response remains to be tested.
The new banking law has also significantly increased BAM’s powers in the event of difficulties in systemically important institutions. The Systemic Risk Supervision and Coordination Committee (CCSRS) has been established to coordinate crisis resolution actions, with the Governor of BAM at its helm.
Conclusion
Overall, Moroccan banks’ efforts to enhance international cooperation and crisis management demonstrate their commitment to stability and sound banking practices in Morocco and abroad.