is highly concentrated, with the six largest banks accounting for 85% of banking sector assets. The IMF/World Bank's updated Financial System Stability Assessment concluded that the system was "stable, adequately capitalized, profitable and resilient to shocks." It noted the progress Morocco has made in deepening financial intermediation (39% of the population has a bank account as of 2009, up from 36% in 2007) and in reducing the overall level of non-performing assets (down from 11% in 2006 to 6% at the end of 2008 and 5.5% by the end of 2009).
A new Moroccan banking law was passed in 2006, strengthening the supervisory power of the central bank and improving risk management practices. Morocco has generally completed adoption of Basel II capital adequacy and risk management guidelines in order to improve financial stability and adopted International Accounting Standards (IAS) intended to enhance transparency.
Credit is allocated on market terms, and foreign investors are able to obtain credit on the local market. There are some cross-shareholding arrangements, but they are not tailored to exclude foreign investment. The Mission has not received any reports of efforts by the private sector or industry to restrict foreign participation in standard-setting organizations. The government has actively sought out the participation of foreign investors for discussions on improving the business climate in Morocco.
Some foreign banks are critical of what they view as a lack of proportional participation in the Moroccan Bankers' Association. However, Moroccan banks are largely in compliance with the Basel I standards and have become almost completely Basel II compliant as required by the Moroccan central bank. Banks are supervised on a consolidated basis and must provide statements audited by certified public accountants. In 2009, ten banks submitted consolidated financial statements based on Basel II standards.
The Casablanca Stock Exchange (CSE), founded in 1929 and re-launched as a private institution in 1993, is one of the few regional exchanges with no restrictions on foreign participation. The market weakened in 2008 and fell further in 2009 when the global credit crisis and its spillover into the real economy dampened foreign investment inflows and demand for exports. The Bourse rebounded sharply in 2010 with the MASI (Moroccan All Shares Index) growing by 21.17%. Although the Casablanca exchange only saw two Initial Public Offerings (IPOs) during 2010, one of the listings came from Morocco’s largest and most important insurance company, CNIA SAADA Assurance, which listed 15% of its shares on the exchange in November. Investors predict more listings and similar gains in 2011 as the Bourse focuses on outreach to its African neighbors.
Analysts note that the market is buoyed by continuing restrictions on the ability of Moroccans to invest abroad. Gradual easing of these limits is widening Moroccan investors' options, however, and recent changes in the Moroccan exchange regime seem aimed at allowing Moroccan financiers to invest more freely into neighboring markets.