Abstract

PurposeThis paper analyzes the ex-ante determinants of asset securitization in Moroccan banks, providing a detailed exploration of factors influencing securitization in the Moroccan banking sector.Design/methodology/approachThe study focuses on funding, performance, risk transfer and regulatory capital arbitrage hypotheses. By employing a probit model, we examined all Moroccan banks that securitized their assets from 2002 to 2022. Additional analyses were conducted with alternative variables and by splitting the sample into two periods, 2002–2013 and 2014–2022, to assess the impact of the regulation law 119-12 implemented in 2013 on the Moroccan securitization market.FindingsThe results indicate that the search for alternative funding sources and bank size emerge as significant factors driving securitization in Morocco. Additionally, there is limited evidence that loan portfolio quality is a decisive factor to securitize. Meanwhile, there is no evidence that securitization is driven by performance and regulatory capital arbitrage. Robustness tests further support these findings, while also suggesting that banks may engage in securitization to enhance their performance and, to a lesser extent, reduce regulatory capital.Originality/valueThis paper contributes to the empirical literature by identifying the determinants that drive Moroccan banks to securitize, addressing a research gap in the relatively understudied Moroccan securitization market. The findings provide valuable insights for bankers, investors and policymakers, highlighting the potential benefits of securitization and suggesting policy changes to foster a robust securitization market while ensuring financial stability.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.