Government Suggested Recommendation Status of Implementation Counterparts Timing Banking Sector Soundness and Vulnerability Carry out more regular BAM Short-term Largely Implemented. and more extreme stress BAM now conducts stress tests based on two tests; base risk hypotheses on macroeconomic scenarios using a credit risk model and relevant macroeconomic is further strengthening its stress tests through the scenarios collaboration with the FSAP team and the ongoing IMF TAs. Continue to closely monitor Short-term Implemented. banks’ on and off balance sheet BAM monitors the on and off-balance FX foreign exchange (FX) risk, exposures of commercial banks on a daily basis, counterparty risk, as well as including their positions on FX forward contracts, compliance with exposure currency swaps and options. limits, hedging and other risk management techniques. Capital Account Liberalization, Monetary Policy, and Liquidity Management Maintain transparency and BAM Medium-term Ongoing. disclosure of capital account BAM publishes on its website regulations and circulars liberalization, as well as detailing the modalities of its intervention and has exchange rate and interest rate strengthened its policy communication framework. In policy reforms and their 2011, BAM expanded the range of eligible collaterals sequencing, to enable financial and introduced longer-term repo operations. BAM is institutions to prepare working with the Ministry of Finance for the transition adequately. to a more flexible exchange rate regime. Insurance Sector MEF Medium-term Implemented. Consider review of the by-laws A new insurance and pension authority was of the insurance supervisor by established in 2015 and will become fully functional designating it an independent upon the appointment of its president and the board of authority or entity analogous to directors. The new by-laws should strengthen the an independent public entity, in supervisor’s independence. order to increase its independence. Access to Finance Ensure open entry to the BAM/MEF On-going Ongoing. financial sector, to deepen financial intermediation and stimulate competition. Include clients of non-bank BAM Medium-term Ongoing. financial institutions and Work underway, with assistance from the IFC to utilities in Credit Bureau integrate non-financial data providers (telecoms, water coverage. and electricity), and appoint a second credit bureau.
Recommendation Government Counterparts Suggested Timing Status of Implementation Banking Sector Soundness and Vulnerability Carry out more regular and more extreme stress tests; base risk hypotheses on relevant macroeconomic scenarios BAM Short-term Largely Implemented. BAM now conducts stress tests based on two macroeconomic scenarios using a credit risk model and is further strengthening its stress tests through the collaboration with the FSAP team and the ongoing IMF TAs. Continue to closely monitor banks’ on and off balance sheet foreign exchange (FX) risk, counterparty risk, as well as compliance with exposure limits, hedging and other risk management techniques. Short-term Implemented. BAM monitors the on and off-balance FX exposures of commercial banks on a daily basis, including their positions on FX forward contracts, currency swaps and options. Capital Account Liberalization, Monetary Policy, and Liquidity Management Maintain transparency and disclosure of capital account liberalization, as well as exchange rate and interest rate policy reforms and their sequencing, to enable financial institutions to prepare adequately. BAM Medium-term Ongoing. BAM publishes on its website regulations and circulars detailing the modalities of its intervention and has strengthened its policy communication framework. In 2011, BAM expanded the range of eligible collaterals and introduced longer-term repo operations. BAM is working with the Ministry of Finance for the transition to a more flexible exchange rate regime. Insurance Sector Consider review of the by-laws of the insurance supervisor by designating it an independent authority or entity analogous to an independent public entity, in order to increase its independence. MEF Medium-term Implemented. A new insurance and pension authority was established in 2015 and will become fully functional upon the appointment of its president and the board of directors. The new by-laws should strengthen the supervisor’s independence. Access to Finance Ensure open entry to the financial sector, to deepen financial intermediation and stimulate competition. BAM/MEF On-going Ongoing. Include clients of non-bank financial institutions and utilities in Credit Bureau coverage. BAM Medium-term Ongoing. Work underway, with assistance from the IFC to integrate non-financial data providers (telecoms, water and electricity), and appoint a second credit bureau.
Morocco-FSAP-Update-FSA-Public-01132017.docx