IMF Staff Country Reports

This technical assistance report on Panama discusses macroprudential policy frameworks. The mission assisted the Superintendency of Banks of Panama (SBP) in developing a roadmap to strengthen the macroprudential policy framework in Panama. The mission found that the SBP has adequate capacity to conduct macroprudential policy. The mission’s main recommendation is to tighten the link between policy objectives, assessments, and tools. The mission recommends preparing and publishing a macroprudential strategy document to clarify the set of indicators and tools corresponding to the policy objectives. This will help the SBP take timely actions with the policy tools tailored to emerging systemic risks. Communication should also be enhanced by making more use of the Financial Stability Report to explain policy decisions and to provide the underlying analysis. The mission also made recommendations on other aspects, such as the expansion of the policy toolkit, in particular to include borrower-based measures on the loan-to-value and debt-service-to-income ratios), which will be followed up on in the second mission.