Background

A joint World Bank and IMF mission visited Morocco in November 2007 to update the analysis and recommendations provided within the framework of an FSAP in 2002. The 2007 FSAP made two sets of recommendations that can relate to the planned FIRST project; these are stress-testing abilities and use of deposit guarantee fund.

Project

The GOALs of this project are (i) to test how the regulatory agencies (the Central Bank, the Capital Market Authority and the Supervisory Body for Insurance Companies) would respond to the emergence of serious problems in one or more financial institutions, including the failure of a systemic bank; (ii) to test intra- and inter-agency coordination by the authorities in a crisis situation, including information sharing, analysis, decision-making and communications; (iii) to ascertain the adequacy of existing laws, regulations, policies and procedures for dealing with such situations; (iv) to identify scope for improvement in all the above.
The PURPOSE is to address these issues in the context of a collective response of the financial sector authorities to a simulated environment of financial sector distress, so as to practice and test ability to work together to maintain financial stability with the least cost and disruption to the functioning of the financial system.
OUTPUTS: The outputs of the project are: (i) preparation and delivery of a roughly six-hour, multi-stage, simulation exercise during the course of a single day; (ii) delivery of a written report to the authorities summarizing the results of the simulation and recommending actions that could be taken by the authorities to improve the structure of their existing regulatory system as well as the weaknesses in communication and coordination within and between the agencies; and, (iii) a dissemination seminar to review the report with the authorities.
ACTIVITIES: The activities of the project are: (i) Exercise specification; (ii) Scenario outline; (iii) Exercise build; (iv) Exercise run and debrief; (v) Exercise reporting; (vi) Dissemination seminar.
Project LIFE TIME is 6 months from December 2008 till May 2009.
Project BUDGET is $249,000.

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