METHODOLOGICAL APPROACH FOR CONSTRUCTING AN AGGREGATE FINANCIAL STABILITY INDEX: THE CASE OF MOROCCO

Authors

  • Imad Bassite Hassan II University of Casablanca – Faculty of Legal, Economic and Social Sciences of Mohammedia (FSJES Mohammedia)
  • El Khattab Younes Hassan II University of Casablanca

DOI:

https://doi.org/10.31000/combis.v7i4.15116

Abstract

This study develops an Aggregate Financial Stability Index (AFSI) for Morocco covering 2000–2023, providing a multidimensional assessment of the resilience of the national financial system. The research contributes to the literature by integrating, for the first time in the Moroccan context, the four key dimensions of financial development, vulnerability, soundness, and the global economic climate into a single composite indicator. Using Min–Max normalization and differentiated weighting, the index measures structural stability and quantifies the volatility contributions of each component. The findings reveal a broadly resilient system, supported by strong prudential regulation and sustained financial reforms, yet increasingly exposed to external shocks and macro-financial vulnerabilities. Financial development and vulnerability appear as the main drivers of overall volatility, while the influence of the global economic climate has intensified since 2010. The originality of this research lies in its empirical decomposition of volatility sources and its operational framework for macroprudential monitoring. The AFSI provides policymakers and supervisory authorities with a predictive tool for assessing systemic risk and enhancing financial stability in emerging economies facing global uncertainty.

Author Biography

  • Imad Bassite, Hassan II University of Casablanca – Faculty of Legal, Economic and Social Sciences of Mohammedia (FSJES Mohammedia)

    Imad Bassite is a PhD candidate in Economics at Hassan II University of Casablanca, within the Faculty of Legal, Economic and Social Sciences of Mohammedia (FSJES Mohammedia). He is affiliated with the Laboratory of Economic and Logistics Performance.
    His research focuses on financial stability, the policy mix, and financial inclusion, with particular attention to the interactions between monetary and fiscal policies, financial system regulation, and the promotion of equitable access to financial services. His approach combines macroeconomic analysis, applied econometrics, and public policy perspectives.

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Published

2025-11-28

Issue

Vol. 7 No. 4 (2025): November

Section

Articles

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