August 3, 2021

Banker sees "urgent" the need to avoid an institutional "implosion" in Panama

Banker sees "urgent" the need to avoid an institutional "implosion" in Panama

The director of the Banking Association of Panama (ABP), Carlos Berguido, called today "urgently" to society to "act to change the terrible state of institutions" in his country, which are at risk of "implosion."

Berguido referred to the need to "rebuild the institutions" at the risk of "losing all the remarkable progress in the last 115 years (of republican life)", in the framework of the inauguration of the third symposium on information security and prevention of fraud of the ABP.

"I can not come to this event and have the luxury of being calm without making the urgent call for all of us to participate in a great national effort to change and improve the terrible state of the institutions that sustain the good government of our country," he exclaimed. an auditorium of a hundred bankers and executives.

He emphasized that "institutionality seems to implode in the face of the impotent gaze of citizens, public confidence continues to erode, the entire society must rise above particular interests, ideological currents or party flags, to rebuild their institutions with the highest degree of commitment" .

"Otherwise, even if we achieve the highest levels of cybersecurity, the remarkable progress achieved during 115 years of republican life runs the risk of being lost, that is an issue that should impact us all as citizens," he added.

After his statement, the executive of the ABP explained to Efe that this was his vision as a citizen.

But "I think I'm reflecting the whole society, bankers, farmers, everyone is worried in Panama, not only the banking sector and that's the way it should be, because we are living in a time of international crisis, and that has to change" , he added.

For Berguido, corruption "is one of the facets, institutions in Panama in general are going through a crisis that must be resolved and we have to face above particular and temporary interests."

"A country with devalued institutions like the one we have does not have a bright future, the future is losing its luster," he said.

Regarding Moody's risk rating agency's assessment of a possible increase in bank default, he said that "there is no doubt that there is a slowdown in the economy, people lose their jobs and this makes it difficult to meet their commitments. "

He confirmed that they also expect, before the end of the year, a new rise in interest rates as a result of the policy of the Federal Reserve of the United States that directly impacts Panama because it is the dollar in current use.

Berguido said they expect "a new increase of a quarter of a percentage point, as has happened on the three previous occasions this year," although "the Federal Reserve sometimes announces it but nothing happens."

We must wait "surely an increase in the delinquent portfolio, but it should not be a surprise to anyone, it is considered within the expected, banks make reservations and are used to going through these cycles," said Berguido but did not advance figures.

On the recent appearance of the Panamanian president, Juan Carlos Varela, before the international financial community and correspondent banking in the United States, he said that it is correct to explain that the country "has economic strength".

"That is his job, to lift people's spirits", but, he clarified, "people become pessimistic about the slowdown period, I understand, it is difficult for that message to be credible" due to the current economic situation.

Panama's economy grew by 5.4 percent in 2017 and an expansion of around 4.5 percent is expected for this year, rates that continue to place the country as one of the most dynamic in the region but that demonstrate a slowdown from 2012, when the indicator was 10.6 percent.

The three-day symposium will discuss with international experts the current state of cybersecurity and the latest developments in this regard.


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