(Agence Ecofin) – In Morocco, banks experiencing liquidity and solvency problems will be able to benefit from emergency liquidity, guaranteed by the State and granted by the Central Bank. This exceptional measure was recently adopted by decree.
In Morocco, the government council adopted on April 6, a decree which authorizes the Central Bank to grant, at its discretion, emergency liquidity to banks having liquidity problems and presenting doubts as to their solvency. According to this law, the facilities granted by Bank Al-Maghrib (BAM) are conditional on a guarantee granted on an exceptional basis by the State, to cover the Central Bank.
In a simple way, to obtain emergency liquidity from the Central Bank, and covered by the State, the banking institution must have liquidity problems (the bank does not have cash immediately and is not able to to meet immediate expenses) and solvency (the bank is not in a position to meet long-term commitments). Then, this bank must have exhausted all possible avenues of refinancing. It will then turn to the Central Bank which will have to assess, through qualitative and qualitative criteria, whether it is eligible for this emergency financing.
Bank Al-Maghrib may therefore make a reasoned request to obtain the state guarantee before granting the cash. This guarantee has a maximum duration of three months, renewable.
For Moroccan financial analysts, the adoption of this decree is an anticipatory and proactive approach by the State and the Central Bank, following the setbacks of large banks at the international level (Silicon Valley Bank in the United States and Crédit Suisse within Swiss State). The economist Omar Bakkou points out that there are not yet in Morocco, warning signs of a panic leading to the withdrawals of massive deposits and likely to constitute a threat for the liquidities of the banks and to particular interventions, beyond those provided by monetary policy.
Chamberlain Moko
