This paper analyzes the behavior of Moroccan bank’s liquidity during the period
2001 – 2012. The research aims to identify the determinants of Moroccan bank’s liquidity.
We first evaluate Moroccan banks’ liquidity positions through different liquidity ratios to
determine the effects of financial crisis on bank’s liquidity. We then highlight the effect of
banks’ size on banks’ liquidity. Finally, we identify determinants of Moroccan bank’s
liquidity using panel data regression. From results obtained, we can conclude that liquidity
has decreased during the last decade. This decline has increased since 2007 with the
financial crisis. We also conclude that banks’ size is a determinant of banks’ liquidity since
liquidity is correlated with size of banks. Large banks are more liquid than small banks.
Results show that in Morocco, liquidity is mainly determined by eleven 11 determinants:
size of banks, share of own bank’s capital of the bank's total assets, external funding to total
liabilities, return on assets, foreign direct investment, monetary aggregate M3, foreign
assets, growth rate of gross domestic product, public deficit, inflation ratio and the effects
of financial crisis. Thus, liquidity of Moroccan banking industry is positively correlated
with bank’s size, share of own bank’s capital of the bank's total assets, external funding to
total liabilities, monetary aggregate M3, foreign assets, foreign direct investment and
negatively correlated with return on assets, inflation rate, growth rate of gross domestic
product, public deficit and financial crisis. However, bank’s return on equity, equity to total
assets and unemployment rate have no impact on Moroccan bank’s liquidity