Crisis resolution framework

 

1. Operational arrangements

 In the event of a systemic crisis, the Systemic Risks Coordination and Monitoring Committee meets   to assess the situation, coordinate its response, and if necessary, decides whether to activate the Crisis Committee.

If the Committee considers that the situation requires a government financial intervention, its chairperson should accordingly inform the Minister of Finance, in his/her capacity as chairperson of the Crisis Committee. The latter should be provided with the conducted analysis, which should cover in particular: (1) the nature and consequences of the shock, (2) a preliminary draft on possible resolution measures, and (3) the recommended timeline for actions to be undertaken. The Crisis Committee measures the likely systemic implications of the crisis and develops tailored responses and a plausible exit strategy.

The CCSRP conducts additional analyses that the Crisis Committee may request, in case of need, and coordinates the implementations of the measures determined by the Crisis Committee.

Bank Al-Maghrib is also entitled to enter into bilateral agreements with bodies in foreign countries entrusted with a similar mission to that entrusted to it, covering, in particular, coordination and intervention procedures for resolving crises affecting subsidiaries or branches located abroad.

2. Emergency liquidity assistance

The emergency lending mechanism is designed to prevent or remedy any situation likely to represent a risk to financial stability, notably through contagion on the interbank money market. These liquidity facilities are granted, only in exceptional circumstances, to credit institutions experiencing temporary liquidity problems, with little or no concern for their solvency.

As part of its mission to contribute to maintaining financial stability, and in accordance with the Bank Al-Maghrib Statute (link to statute - article 67), the Bank may provide, at its discretion, emergency liquidity in favor of :

  • A credit institution with temporary liquidity problems but no solvency concerns;
  • A credit institution with liquidity problems and doubts about its solvency, provided it has a government guarantee to cover these operations.

In each case, the Bank determines the amount of liquidity and the terms and conditions for granting it, in particular as regards eligibility, remuneration, guarantee and maturity.

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