Morocco’s Central Bank Authorized to Provide Emergency Liquidity to Struggling Banks

Good news for banks with liquidity and solvency problems. The government council, through the adoption of a decree on April 6, gave the green light to Bank Al-Maghrib (BAM) to "grant them, at its discretion", emergency liquidity, reports Agence Ecofin. Upstream, the State must exceptionally grant a guarantee to cover the central bank. The maximum duration of this guarantee is three months. Moroccan financial analysts welcomed the adoption of this decree. According to them, it is an anticipatory and proactive approach by the State and the Central Bank, after the setbacks of large banks at the international level (Silicon Valley Bank in the United States and Credit Suisse in the Swiss state).

What are the conditions to be eligible for emergency liquidity from the Central Bank, covered by the State? The bank must have liquidity problems, i.e. it does not have immediate cash and is unable to meet immediate expenses. It must also have solvency problems, i.e. it is unable to meet long-term commitments. Another condition: exhaust all possible refinancing avenues.