Regulatory Alerts2023-10-30
Agreement No. 5 (2023): Establishing Rules on the Capital Conservation Buffer
The Banking Superintendence of Panama issued Agreement No. 005-2023 to establish a mandatory 2.5% capital conservation buffer for banks, requiring them to hold ordinary primary capital above minimum regulatory thresholds to enhance solvency during stress periods. The regulation applies to all licensed banking entities and imposes strict restrictions on dividend distributions and share repurchases when the buffer is not met, while mandating the Board of Directors to implement immediate corrective plans for any deficits. Compliance is phased in gradually from July 1, 2024, to July 1, 2026, with full implementation required by the final date.
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