There has been banking activity in Panama since the mid XIX century however the banking business was first regulated in 1970 with the first banking law: Cabinet Decree No. 238 of July 2, 1970. This decree allowed the banking business in Panama to grow and made it a secure, regulated place where foreign banks could establish branches. This decree added to other factors, such as the lack of central banking, the US Dollar as legal tender, the absence of restrictions to capital markets made it an attractive market for foreign banks.
The year 2008 was a crucial year for the banking center as the worldwide financial crisis struck and many financial centers collapsed however Panama’s banking center weathered the crisis quite well. Net profits from January to April of this year are $374 million, 9.8% growth fueled by greater investment income and a decrease in expenditures.
Today, 40 years later it has 91 banks with assets of $64.4 billion and a liquidity index of 65.87% and 19,200 employees. The 1970 decree that gave birth to the banking center also created its first regulating entity, the National Banking Commission. Law Decree 9 of February 26, 1998 modified the original decree and created the Bank Superintendency which is still the regulating entity of the banking center. Information about the Bank Superintendency can be found at http://www.superbancos.gob.pa This law gave the Bank Superintendency financial and administrative autonomy. The law was once again modified in 2008 to give the Bank Superintendent more powers.
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