panama to become financial hub for central america
News Posted On: 05 April 2011
Panama is well on the way to becoming the financial hub for central America as it has just been chosen to be the site of the Central American Counsel of Superintendents of Banks permanent headquarters. The aims of this agency are to ensure close corporation between member countries.
These member countries currently consist of the Dominican Republic, El Salvador, Guatemala, Costa Rica, Honduras, Nicaragua, and of course Panama.
Alberto Diamond, Panama Bank superintendent has said that the country's financial hub grew by around 11.4% in 2010 and has consolidated assets totalling $71.3 billion. Net revenue was $1.67 billion which is 16.1% more than 2009, and much of this came from foreign exchange transactions and commissions and dividends.
The banking industry here is quite conservatively managed which led to Panama banks achieving just over 65.7% asset liquidity in 2010 which is more than twice the required 30%.
Panama has weathered the financial crisis reasonably well and the economy here grew by 7% in 2010. Banking accounts for around 11% of Panama's gross national product and Panamanian laws protect anyone who banks here.
Panama doesn't have a central bank, but the economy here is based on US dollars, as a treaty was signed between Panama and the US in 1904 just after Panama declared independence from Colombia.
The closest thing it does have to a central bank is the Panama National Bank which doesn't issue paper currency but instead regulates the supply of dollars through the Federal Reserve Bank of New York, however it does mint its own coins which are exactly the same shape as US coins.
The country is currently working hard to attract Latin America's big banks to set up branches here and it is looking towards Brazil, Chile and Mexico.
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