Panamanian banks are strong, very safe, and very liquid.
The banks here in Panama are much smaller than the banks in the US, but they are stronger because the banks here are more liquid. Every month, the bank supervisor checks the liquidity of every bank in Panama. The supervisors examine each bank’s portfolio. If they find a problem, they tell the bank to fix the problem in some period of time (for example, 30 days), and if the bank does not comply, they fine the bank or close it down. Panama is a very small country where the supervisors are there around the corner.
Panama has 110 banks, but not all of them are Panamanian banks. Approximately half of them are major international banks, for example, Bank of China, Bank of America, and Citibank. We have most of the major banks in the world right here in Panama now, and there are more banks coming in. When the Canal expansion is complete, there are going to be a lot new businesses, and banks want to be in on that. The banks lend money that winds up in the local economy, and the companies deposit their money in US dollars in the Republic of Panama, contributing to our financial strength.
Panama does not have FDIC insurance, but I’m sure that the superintendents review the banks in order to protect your money. In the last few years, one of the banks was sold because of that, and everybody got their money. I can’t remember any time when any depositor lost any money.
Many international banks chose to locate in Panama for several reasons. We have very good electronic communication because the cable that runs under the sea ends and starts here. We have very good air communication because you could be here in Panama from quite a few countries in the world within 8 hours and from the United States within three hours. The money we use is US dollars. We don’t print money so we cannot inflate our currency like any other Latin country. We are backed by the US dollar, which means whatever happens in the United States happens here, although our economy is different than the United States. Using the US dollar is a very large advantage, because importers and exporters buy goods US dollars and hold their money in our local banks in US dollars without fear of currency fluctuations.
(Bank of China logo, pictured.)