Banking booms in spite of scandals

THE FALLOUT from the Mossack Fonseca (Panama Papers) revelations and the placing of sanctions on  the 68 Waked family businesses by the US Treasury has not stopped the growth of Panama’s banking industry.

At the inauguration of the first Latin American Summit of Financial Risk,  held in Panama City, Banking Superintendent Ricardo Fernández said that the international banking center of the country had assets of $118.6 billion by the end of July.

That is  an increase of 2.7 percent in comparison with the previous year.

The local credit portfolio increased by 10 percent and Fernandez said that the “credit business maintains positive growth.”

He said that this is a reflection of growth in construction (14.3 percent), mortgages (13.8 percent), industry (15.1 percent) and agricultural (9.9 percent).

There is also  a growth in total deposits, which increased 1.9 percent to $84.7 billion which the superintendent ascribes to. to confidence in the local banking sector.

Deposits have continued to grow despite the international cases that have affected the reputation of Panama, like the release of the  Mossack Fonseca files and the placement of the Waked family on a US government sanctions list.

These cases have prompted a discussion of initiatives that would make the industry more transparent.

“Strengthening the framework of transparency in our financial system is a step in the right direction and sends a signal to the market and different regulators about the commitment and the seriousness with which the banking system manages its risks,” Fernández said..

On Sept. 20, the National Assembly approved on third debate the law that guarantees the intergovernmental agreement between Panama and the United States for exchanging banking information.

The executive also presented to the Assembly a project that would change reporting requirements for offshore companies that have been suggested by the Organization for Economic Cooperation and Development (OECD).

Some say, however, that these initiatives will result in a loss of competitiveness of the financial platform and the country’s legal services but Fernandez said the latest statistics of the banking sector refute this hypothesis.