Rejection of Stimulus Program Conditions

Panamanian banks will not use Financial Stimulus Program funds due to their terms and conditions.

Wednesday, May 6, 2009

The Banking Association of Panama, through its president, Mosi Cohen, told the new government’s transition team that banks have not and will not use Financial Stimulus Program (PEF) funds unless there is a change in the terms and conditions.

Journalist Edith Castillo Duarte wrote in a Prensa.com article: "ABP (Panamanian Banking Association) seeks conditions that are more flexible and consistent with our reality in order to maximize these resources and [Cohen] recommended for the new government’s team not to commit to using the funds from the Inter-American Development Bank (IDB) because they would have a very high cost for the country under the conditions that these funds have been presented to us.”

More on this topic

Panama: Financial Stimulus Program Beginning to be Used

June 2009

Three financial companies have requested a total of $100 million from the Financial Stimulus Program, which up to now had not been utilized.

The three banks that requested funds from the Financial Stimulus Program (PEF), as confirmed by the executive of the National Bank of Panama, Darío Berbey, are firms with foreign and Panamanian capital. Due to issues of confidentiality, their names were not revealed.

$500 Million Already Available for Panamanian Banks

April 2009

The $500 million contributed by the IDB for the financial incentives program will be available beginning on May 10.

The National Bank of Panama will manage the $500 million available to Panamanian banks through loans with two-year terms and an interest rate of 4.50%, with interests for LIBOR services at 6 months.

Panama: Terms for the Financial Stimulus Program Known

April 2009

The National Bank has announced the terms and conditions under which PEF loans can be accessed.

Bank Manager Juan De Dianous reported that the loans will be in terms of up to seven years and under the individual parameters of the three entities that have contributed funds.

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."

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