{
  "title": "Panama: Financial Sector Assessment Program - Technical Note on Financial Safety Net, Resolution, and Crisis Management",
  "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-technical-note-on-financial-safety-net-552158",
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  "summary": "This paper presents a technical note on financial safety net, resolution, and crisis management in Panama. Key institutional pillars of a financial safety net have not been established in Panama.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Key institutional pillars of a financial safety net have not been established in Panama.\n- An explicit industry-funded deposit insurance system should be established as a key element of an effective financial sector safety net in Panama.\n- Superintendency of Banks of Panama (SBP) is the resolution authority for banks in Panama; the SBP relies on strong prudential supervision to avoid bank failures and remove weak institutions.\n- The current approach to bank resolution has not changed since the 2012 Financial Sector Assessment Program and recent technical assistance missions.\n- The legal framework underpinning SBP corrective actions, its overall powers and approach to handling bank insolvency has not changed since passage of the Banking Law in 2008.\n- Panamanian authorities have undertaken a review of the current resolution framework and have determined there is need for improvement.\n- Authorities should build upon current domestic and regional efforts, and develop their internal, interagency, and cross-border coordination and communication mechanisms for bank resolution and crisis management."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Establish an explicit industry-funded deposit insurance system as a central component of the financial safety net.\n- Strengthen internal, interagency, and cross-border coordination and communication mechanisms for bank resolution and crisis management.\n- Build upon current domestic and regional efforts to improve the resolution framework."
    },
    {
      "heading": "Institutional and legal context",
      "content": "- Resolution authority: Superintendency of Banks of Panama (SBP).\n- Reliance on prudential supervision: SBP's approach prioritizes strong prudential supervision to prevent bank failures and to remove weak institutions.\n- Legal framework status: No substantive change in the legal framework governing SBP corrective actions and handling of bank insolvency since the Banking Law in 2008.\n\n---\n\n Content in this bundle\n\n- 1panea2024005\n  - 1panea2024005 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1panea2024005 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: July 19, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400284830.002",
    "Key institutional pillars of a financial safety net have not been established in Panama.",
    "An explicit industry-funded deposit insurance system should be established as a key element of an effective financial sector safety net in Panama.",
    "Superintendency of Banks of Panama (SBP) is the resolution authority for banks in Panama; the SBP relies on strong prudential supervision to avoid bank failures and remove weak institutions.",
    "The current approach to bank resolution has not changed since the 2012 Financial Sector Assessment Program and recent technical assistance missions.",
    "The legal framework underpinning SBP corrective actions, its overall powers and approach to handling bank insolvency has not changed since passage of the Banking Law in 2008.",
    "Panamanian authorities have undertaken a review of the current resolution framework and have determined there is need for improvement.",
    "Authorities should build upon current domestic and regional efforts, and develop their internal, interagency, and cross-border coordination and communication mechanisms for bank resolution and crisis management.",
    "Establish an explicit industry-funded deposit insurance system as a central component of the financial safety net.",
    "Strengthen internal, interagency, and cross-border coordination and communication mechanisms for bank resolution and crisis management.",
    "Build upon current domestic and regional efforts to improve the resolution framework.",
    "Resolution authority: Superintendency of Banks of Panama (SBP).",
    "Reliance on prudential supervision: SBP's approach prioritizes strong prudential supervision to prevent bank failures and to remove weak institutions.",
    "Legal framework status: No substantive change in the legal framework governing SBP corrective actions and handling of bank insolvency since the Banking Law in 2008.",
    "**1panea2024005**"
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