Despite continuing volatility in the global financial markets, Morocco’s relative isolation has thus far minimized the effects of the turmoil on the country’s banks. The Kingdom’s sound financial fundamentals may, however, still face the effects of a global contraction. Although these factors will certainly provide challenges in 2009, the central bank, Bank Al Maghreb, has already begun to take proactive measures, while the underlying strength of the banking system should prevent significant decline. In a recent report, Standard & Poor’s credits highly restrictive regulations for reducing the North African nation’s exposure to international investment products. However, the analysis cautions that the weakening economy may become a risk to the banking sector as remittances, tourism inflows, trade volumes and foreign direct investment (FDI) decline. A drop in these sources of revenue, coupled with a correction in the real estate sector, may affect the strength of Morocco’s banks. Still, the government is
