Morocco : Financial Sector Strategy Note
The report presents an overview of financial sector reforms in Morocco, between 1990-1998, a period notable for liberalization. Reforms targeted the banking sector, development of the capital market, and liberalization of the financial sector, with...
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| Language: | English en_US |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2000/09/692988/morocco-financial-sector-strategy-note http://hdl.handle.net/10986/14986 |
| Summary: | The report presents an overview of
financial sector reforms in Morocco, between 1990-1998, a
period notable for liberalization. Reforms targeted the
banking sector, development of the capital market, and
liberalization of the financial sector, with recent reform
efforts focused on savings institutions (insurance and
pension funds). Included were the elimination of credit
ceilings, interest rate liberalization, and overhaul of the
legislative framework governing lending institutions, namely
through the adoption of the new Banking Law of 1993. As a
result, the financial sector is increasingly operating in
accordance with market rules, and, financial inter-mediation
has intensified. The financial situation of commercial banks
is healthy, and has clearly improved since 1993, with
foreign exchange risk exposure well below prudential limits.
However, management of credit risk should improve, due to
the high percentage of non-recoverable loans. Return on
equity of Moroccan banks has been satisfactorily achieved,
despite weak responsiveness by bank lending, and short-term
rates to market conditions. Recommendations include
reduction of bank inter-mediation costs, while preserving
financial soundness; improvement of bank prudential
regulation, and financial disclosure; increased lending and
savings competition; and, promotion of market-based interest
rates, and, reform of the government securities market. |
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