The prudential regulations of Basel in Morocco: state of play, and contributions for the banking sector

Banque, règles prudentielles, Bâle, Solidité financière, comité de Bâle.

Abstract

This paper aims to justify the importance of prudential regulation for the viability and sustainability of banks. Thus, after presenting the context of the emergence of prudential banking rules and their evolution towards Basel standards, we demonstrate, through a content analysis of a set of banking reports, their influence on the Moroccan banking sector. Since we are in a debt economy where the financing of economic agents is provided almost entirely by the banking sector, this has motivated this research to focus and dig to highlight the elements justifying said prudential regulation. On this path we proceeded to the collection of data based on the studies already initiated in the matter and by analyzing reports and studies of the central bank as well as the annual reports of the main banks in Morocco. A response to this problem seems essential to us because the stability, security and proper functioning of the banking system is an important pledge with regard to economic entities whose financing passes largely through banking intermediation. The main results of this study highlight: first the growing need for the application of Basel standards by Moroccan banks to cope with negative hazards due to various banking risks and secondly to fully ensure their mission of financing the economy. Having said that, we can therefore conclude that this new regulation mainly affects banks' own funds, and for good reason, the banks constitute the last bulwark because they manage public savings and are entrusted with their trust. This means that their own funds must be permanently strengthened to be able to absorb any losses.

JEL Classification: G320

Paper type: Theoretical Research