{
  "title": "Panama: Financial Sector Assessment Program - Detailed Assessment of Observance and Basel Core Principles for Effective Banking Supervision",
  "publication": "IMF Staff Country Reports, July 19, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/07/19/panama-financial-sector-assessment-program-detailed-assessment-of-observance-and-basel-core-552146",
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  "summary": "This paper discusses Panama’s Basel Core Principles for Effective Banking Supervision report. The Superintendency of Banks of Panama (SBP) has made significant progress in updating its regulatory and supervisory framework.",
  "sections": [
    {
      "heading": "Regulatory and Supervisory Framework",
      "content": "- The Superintendency of Banks of Panama (SBP) has made significant progress in updating its regulatory and supervisory framework.\n- Regulations issued by the SBP set out a comprehensive set of requirements for a bank’s Board and senior management to be responsible for preparing financial statements that adhere to international accounting standards."
    },
    {
      "heading": "Liquidity Regulation",
      "content": "- Liquidity regulations are generally comprehensive.\n- The Liquidity Coverage Ratio is calculated and reported on a Level 1 basis and not L2 or group-wide."
    },
    {
      "heading": "Off‑Site Supervision and Analysis",
      "content": "- Off-site analysis occurs on a frequent basis using a comprehensive suite of indicators and data points."
    },
    {
      "heading": "Credit Concentration Risk and Large Exposures",
      "content": "- The SBP has implemented a framework for credit concentration risk and large exposure limits.\n- The framework does not apply to all material sources of concentration risk."
    },
    {
      "heading": "Financial Reporting and Accounting Oversight",
      "content": "- The SBP’s regulations require that a bank’s Board and senior management are responsible for preparing financial statements in accordance with international accounting standards."
    },
    {
      "heading": "Market Risk Governance",
      "content": "- Banks must identify and appropriately manage the market risks they face.\n- The Board of Directors has primary responsibility for establishing policies and procedures to identify market risks."
    },
    {
      "heading": "Key Findings and Policy Implications",
      "content": "- SBP progress: Significant updates to regulatory and supervisory framework.\n- Liquidity reporting gap: LCR is only calculated and reported on a Level 1 basis; not calculated on L2 or group-wide basis — suggesting a need to extend LCR measurement and reporting to L2 and group-wide scopes.\n- Concentration coverage gap: Credit concentration and large exposure limits exist but do not cover all material sources of concentration risk — suggesting a need to broaden the framework to capture all material concentrations.\n- Strong governance expectations: Clear regulatory assignment of responsibility to Board and senior management for financial reporting and for overseeing market risk identification and management.\n- Supervision intensity: Frequent off-site analysis supported by a comprehensive suite of indicators and data points.\n\nSource: Panama: Financial Sector Assessment Program - Detailed Assessment of Observance and Basel Core Principles for Effective Banking Supervision, July 19, 2024.\n\n---\n\n Content in this bundle\n\n- 1panea2024003\n  - 1panea2024003 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1panea2024003 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: July 19, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400284670.002",
    "The Superintendency of Banks of Panama (SBP) has made significant progress in updating its regulatory and supervisory framework.",
    "Regulations issued by the SBP set out a comprehensive set of requirements for a bank’s Board and senior management to be responsible for preparing financial statements that adhere to international accounting standards.",
    "Liquidity regulations are generally comprehensive.",
    "The Liquidity Coverage Ratio is calculated and reported on a Level 1 basis and not L2 or group-wide.",
    "Off-site analysis occurs on a frequent basis using a comprehensive suite of indicators and data points.",
    "The SBP has implemented a framework for credit concentration risk and large exposure limits.",
    "The framework does not apply to all material sources of concentration risk.",
    "The SBP’s regulations require that a bank’s Board and senior management are responsible for preparing financial statements in accordance with international accounting standards.",
    "Banks must identify and appropriately manage the market risks they face.",
    "The Board of Directors has primary responsibility for establishing policies and procedures to identify market risks.",
    "SBP progress: Significant updates to regulatory and supervisory framework.",
    "Liquidity reporting gap: LCR is only calculated and reported on a Level 1 basis; not calculated on L2 or group-wide basis — suggesting a need to extend LCR measurement and reporting to L2 and group-wide scopes.",
    "Concentration coverage gap: Credit concentration and large exposure limits exist but do not cover all material sources of concentration risk — suggesting a need to broaden the framework to capture all material concentrations.",
    "Strong governance expectations: Clear regulatory assignment of responsibility to Board and senior management for financial reporting and for overseeing market risk identification and management.",
    "Supervision intensity: Frequent off-site analysis supported by a comprehensive suite of indicators and data points.",
    "**1panea2024003**"
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