Featured Product

    IMF Issues Reports on the 2017 Article IV Consultation with Morocco

    March 12, 2018

    IMF issued staff report and selected issues report in the context of the 2017 Article IV consultation with Morocco. The IMF Directors noted that the banking sector in the country remains sound and well-capitalized. They welcomed continued efforts of Bank Al Maghrib to increase supervisory capacity, in line with the 2015 Financial Sector Assessment Program (FSAP) recommendations, including more risk-based and forward-looking supervision and tighter provisioning requirements.

    The staff report highlights that banks are well-capitalized, but levels of non-performing loans (NPL), credit concentration, and expansion in Africa remain significant risks. Tier 1 capital ratio of banks was at 13.7% at the end of June 2017. NPL ratios remain relatively high at 7.9%, but provisioning levels are comfortable (70%) and increasing. Risks from large credit exposures persist and have increased slightly in 2017, despite strict regulatory limits. The new legal framework for collateral execution, which will help accelerate NPL resolution and increase recovery rates, is expected to be approved in early 2018. The continued expansion of Moroccan banks in Africa (most recently in Egypt) provides diversification and profit opportunities, but is also a channel of risk transmission, given the riskier local operating environment and lower regulatory standards in host countries. Regulatory limits to reduce credit concentration as well as collaboration with cross-border supervisory bodies, to contain risks related to the expansion of Moroccan banks in Africa are being strengthened.

    The staff report also states that the new macro-prudential framework includes countercyclical capital buffers as a policy tool. Progress is underway to address data gaps for macro-prudential surveillance (for example, loan-to-value and debt-service-to-income ratios) and to design capital surcharges for systemic banks. Additionally, the authorities are pursuing a multi-year initiative to upgrade the bank resolution framework of Morocco, consistent with the recent FSAP and Technical Assistance recommendations (including the “least-cost” principle, changes to the deposit guarantee scheme, and bail-in powers). Given the need for a comprehensive overhaul of the legal framework, designation of Bank Al Maghrib as the resolution authority will not be introduced in the new central bank law that is expected to be approved by parliament in 2018.

    The selected issues report discusses the distributional effects of tax reforms in Morocco and highlights that further improvements in governance, labor regulations, and education are needed to support structural transformation in Morocco.

     

    Related Links

    Keywords: Middle East and Africa, Morocco, Banking, NPLs, Macro-prudential Framework, FSAP, Article IV, IMF

    Related Articles
    News

    MAS Amends Notice 610 on Reporting Templates for Banks in Singapore

    MAS published amendments to Notices 610 and 1003 related to submission of statistics and returns, along with the reporting templates and frequently asked questions (FAQs) associated with these Notices.

    January 24, 2020 WebPage Regulatory News
    News

    HKMA Updates Policy Module on Supervisory Review Process

    HKMA is issuing, by notice in the Gazette, revised versions of two Supervisory Policy Manual modules as statutory guidelines under section 7(3) of the Banking Ordinance. The Supervisory Policy Manual modules are CA-G-5 on “Supervisory Review Process” and SB-2 on “Leveraged Foreign Exchange Trading.”

    January 24, 2020 WebPage Regulatory News
    News

    PRA Amends Pillar 2 Capital Framework for Banks

    PRA published the policy statement PS2/20 that contains the final amendments to the Pillar 2 framework and provides feedback to responses to the consultation paper CP5/19 on updates related to Pillar 2 capital framework.

    January 23, 2020 WebPage Regulatory News
    News

    BIS Survey Examines Progress of Central Banks Toward Digital Currency

    BIS published a paper that presents the results of a survey that asked central banks how their plans are developing in the area of central bank digital currency (CBDC).

    January 23, 2020 WebPage Regulatory News
    News

    FED Proposes to Revise Information Collection Under Market Risk Rule

    FED proposed to revise and extend, for three years, FR 4201, which is the information collection under the market risk capital rule.

    January 22, 2020 WebPage Regulatory News
    News

    HKMA Consults on Stay Rules on Financial Contracts Under FIRO

    HKMA published proposals for making rules related to contractual stays on termination rights in financial contracts for authorized institutions under FIRO or the Financial Institutions (Resolution) Ordinance (Cap. 628).

    January 22, 2020 WebPage Regulatory News
    News

    MAS Amends Notices on Minimum Liquid Asset Requirements for Banks

    MAS published amendments to Notices 1015, 613, and 649 related to the minimum liquid assets (MLA) requirements.

    January 21, 2020 WebPage Regulatory News
    News

    APRA Publishes Submission on Fintech and Regtech

    APRA published its submission, to the Senate Select Committee, on financial technology and regulatory technology.

    January 21, 2020 WebPage Regulatory News
    News

    OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022

    OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022.

    January 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guideline on Threshold for Credit Obligations Past Due

    ECB published a draft guideline, along with the frequently asked questions (FAQs), on the definition of the materiality threshold for credit obligations past due for less significant institutions.

    January 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4541