Panamas banking system riding out twin storm

THE  RECENT   twin blows to Panama’s reputation  – publications about the law firm Mossack Fonseca and the decision by the U.S. Treasury Department to place companies linked to the Waked family on the Clinton list have not so far spurred investor flight from the country, say government officials

A loss of investor confidence would make it more expensive for Panama to finance its debt, although the recent Tpcumen SA Bond Issue was forced to provide a higher interest rate.

The perception of risk among international investors toward Panama and the liquidity of the banking system have not been affected A report by the Directorate of Public Financing of the Ministry of Economy and Finance reflects that Panama’s credit default swaps, insurance against non-payment of debt instruments of an entity, have not been impacted by the scandals.

It concludes that “the market has not taken the Panama Papers as a threatening element for our debt commitments.”

In addition, it stated that the country’s debt continues to be regarded as a safe instrument compared to bonds issued by other countries. That is based on Panama’s economic performance.

Ministry official Rogelio Alvarado said he has been given weekly updates on the liquidity in the banking system, and “to date, we have found no symptoms of capital flight or a decrease in investment