El Ammari Mehdi
Dr S. Koubida
The financial crisis that the world is encountering now is describes as the worst of all times. It has affected almost every country in the world; creating recessions, increasing unemployment and the government’s deficits. However, Morocco in considered as one of the few exceptions. Unlike the other world’s power, Morocco has known an economic growth of 2% since the beginning of the crisis (The financial times, The Sunday times.) Most financial analysts relate this Moroccan exception to the Moroccan central bank (Bank Al Maghreb) and its banking system. So how does the banking system in Morocco works, how does the central bank supervises this system within the financial institutions, and what role did it play in facing the world’s financial crisis. Bank Al Maghreb, which is the Moroccan central bank, was founded in 1959; right after Morocco took its independence. Since that time, this system was responsible of the most important financial decision in the kingdom, such as implementing the monetary policies instruments, managing the public exchanges reserves as well as advising the government on financial issues and taking part in the negotiations and implementations of international financial agreements (Bank Al Maghreb website). In order to have a deeper understanding about the central’s bank strategies and policies and its banking system, we must first of all take an overview about its banking laws. The Banking laws in Morocco, which are of course determined and implemented by the central bank consists of 8 major points: -Scope and institutional framework: This part of the banking law consists on recognizing and distinguishing between the types of financial institutions ( banks, loans agency…), recognizing loans and distinguishing between the different parts of them ( Leasing, Bank loans…) and also stating who are the people that are legitimate to receive loans and the financial institution that are allowed to give them. -Granting approval, conditions and withdrawal of authorization to credit institutions: This part of the banking law focuses only on the financial institutions, by stating the requirement for creating a financial institution and getting the agreement from the central bank, the obligation and rules that this institution has to follow , and the conditions under which the financial institution will be taken away its authorization . -Accounting and prudential: The first part of this law consists on the accounting laws and regulations that the central bank imposes to any financial institutions, concerning their accounting documents, how they have to be made and when. The second part is more focused on the obligation of any financial institution to have an internal control system that controls of all the risks that they can encounter and preparing strategies that can estimates their profitability from their operations. -Supervision of financial institutions: This law states the right of the central bank to control that the other banks are respecting all the regulations. This can be made by demanding any documents from any financial institution, intervening if this institution has any kind of problem that the central bank sees it as important. -Temporary administrations and liquidation of financial institutions: The first part of this law gives the right to the central bank to assign a temporary administration to any financial institution, if the central bank deduct that this institution has serious financial problems, or didn’t follow the rules of the banking law. In this case, the temporary administration is determined by the governor of the central bank for a specific period of time, in order to determine whether this institution can redress or not. The second part is about the actions that the central bank will take if the financial institution in no longer functional (Taking the...