## Panama: Financial Sector Assessment Program - Detailed Assessment of Observance and Basel Core Principles for Effective Banking Supervision

_IMF Staff Country Reports, July 19, 2024_

## Source details

**Canonical URL:** [Panama: Financial Sector Assessment Program - Detailed Assessment of Observance and Basel Core Principles for Effective Banking Supervision](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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## Bibliographic details
- Published: July 19, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400284670.002

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### Regulatory and Supervisory Framework
- 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 Regulation
- 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 Supervision and Analysis
- Off-site analysis occurs on a frequent basis using a comprehensive suite of indicators and data points.

### Credit Concentration Risk and Large Exposures
- 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.

### Financial Reporting and Accounting Oversight
- 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.

### Market Risk Governance
- 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.

### Key Findings and Policy Implications
- 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.

*Source: Panama: Financial Sector Assessment Program - Detailed Assessment of Observance and Basel Core Principles for Effective Banking Supervision, July 19, 2024.*

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_Source: https://www.imf.org/en/publications/cr/issues/2024/07/19/panama-financial-sector-assessment-program-detailed-assessment-of-observance-and-basel-core-552146_