Financial Stimulus Program is Law in Panama

The law establishes a trust fund of $1.11 billion to be used by banks to finance productive investment.

Thursday, March 12, 2009

According to the Cabinet Decree which was approved March 9, the resources should be directed to finance new productive investments or those that were begun after June, 2008.

The article in prensa.com indicated: "They can also be used as working capital to cover the needs for continued or expanded operation in the short term and for short-term loans (up to two years) for foreign trade."

More on this topic

Panama: Financial Stimulus Program is Ready

April 2009

The terms and conditions of the Financial Stimulus Program for banks to access the $1.11 billion are ready.

The banking industry has repeatedly indicated that for the program to be attractive, it should allow the use of funds without the submission of collateral. However, according to an article in Prensa.com, a government source said: "It is going to be difficult to omit this requirement [the filing of collateral] because the Government is responsible for the use of this money."

Panama: Financial Stimulus program will require collateral

February 2009

Banks participating in the program won't benefit from lower rates nor more flexible conditions than those provided by their correspondent banks.

Diego Quijano, in an article published in Prensa.com, writes: "This is because the cost of the funds won't be subsidized and collateral will be required, for the program to be 'sustainable'".

$1.1 billion for Panama banks

January 2009

President Martin Torrijos announced that his government will create the fund to help local banks which are having problems accessing international markets for credit.

Dialogociudadano.com reports: "Torrijos said in a discourse that the fund will be established with loans from the Andean Development Corporation (CAF) and the Inter-American Bank (IDB) as well as from the National Bank of Panama, in order to provide help to banks in the country with cash problems, in case it is needed.

Aid proposed for Panama banks

January 2009

The Panama Bank Association (ABP) recommended that the Government start, as soon as possible, a program to reactivate the economy via the banks.

Prensa.com reports: "This means that the State can drive the economy via local banks by granting loans to sectors that will generate employment and wealth for the country," said the new president of the ABP, Moises Cohen, in his inauguration speech.

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