Regulatory Alerts2018-07-03
Agreement No. 004-2008 on the Legal Liquidity Index
The Banking Superintendence of Panama issued Agreement No. 004-2008 to establish comprehensive liquidity risk management requirements and define the legal liquidity index for General and International License Banks. The regulation sets a minimum legal liquidity index of 30%, reduced to 20% for entities with high interbank deposit averages, while specifying eligible liquid assets and their risk weightings. It mandates strict governance structures, contingency planning, and reporting procedures to ensure effective liquidity risk control within the Panamanian banking system.
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