Regulatory Alerts2025-08-19
Agreement No. 7 (2025): Guidelines for the Establishment and Management of a Capital Buffer for Locally Systemic Banks
The Panama Banking Superintendence issued Agreement No. 7-2025 to establish a capital buffer framework for banks deemed locally systemic, requiring them to hold additional Common Equity Tier 1 capital based on a weighted assessment of size, interconnectedness, substitutability, and complexity. The regulation mandates that banks failing to meet these buffer requirements face restrictions on dividend distributions and share repurchases until the deficit is remedied through approved capital expansion plans. These provisions will enter into force on July 1, 2027, with a transitional period allowing banks to gradually meet the full buffer requirement by July 1, 2032.
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