Agreement No. 014-2019 Modifying the Legal Liquidity Index Percentage Under Article 20 of Agreement No. 4-2008

Republic of Panama
Banking Superintendence
AGREEMENT No. 014-2019
(of December 17, 2019)
"By which the percentage established in Article 20 of Agreement No. 4-2008 on the legal liquidity index is modified"

THE BOARD OF DIRECTORS in exercise of its legal powers, and

CONSIDERING:

That following the issuance of Law Decree No. 2 of February 22, 2008, the Executive Branch prepared a systematic ordering in the form of a single text of Law Decree No. 9 of February 26, 1998, and all its modifications, which was approved through Executive Decree No. 52 of April 30, 2008, hereinafter the Banking Law;

That in accordance with what is provided in numerals 1 and 2 of Article 5 of the Banking Law, it is the objective of the Banking Superintendence to ensure that the solidity and efficiency of the banking system are maintained, as well as to strengthen and foster the conditions conducive to the development of the Republic of Panama as an international financial center;

That in accordance with Article 11, section I, numeral 5 of the Banking Law, it is a technical attribute of this Board of Directors to fix, within the administrative scope, the interpretation and scope of legal or regulatory provisions in banking matters;

That in accordance with Article 78 of the Banking Law, general license banks shall maintain assets in the country equivalent to the percentage of their local deposits determined by the Superintendence in accordance with national economic or financial conditions;

That likewise, Article 78 of the Banking Law establishes in its paragraph that until such time as the Banking Superintendence decides otherwise, the percentage referred to in said article shall be eighty-five percent (85%);

That by Agreement No. 4-2008 of July 24, 2008, this Superintendence issued new provisions for the compliance of the legal liquidity index;

That by Article 20 of Agreement No. 4-2008, it is established that for the purposes of Article 78 of the Banking Law, only general license banks shall be obligated to maintain assets in Panama equivalent to eighty-five percent (85%) of their local deposits;

That in attention to the internal analyses carried out by the technical team and to the faculty of the Superintendence to modify the percentage referred to in Article 78 of the Banking Law, it has been considered convenient to decrease the percentage that must be used for the calculation of the relationship between local assets and local deposits;

That in working sessions of this Board of Directors, the need and convenience of modifying Article 20 of Agreement No. 4-2008 has been manifested, in order to decrease the percentage referred to in Article 78 of the Banking Law.

Agreement No. 014-2019

AGREES:

ARTICLE 1. Article 20 of Agreement No. 4-2008 is hereby amended as follows:

ARTICLE 20: RELATIONSHIP BETWEEN LOCAL ASSETS AND LOCAL DEPOSITS. For the purposes of Article 78 of the Banking Law, only general license banks shall be obligated to maintain assets in Panama equivalent to sixty percent (60%) of their local deposits.

ARTICLE 2. VALIDITY. This Agreement shall enter into force from its promulgation.

Given in the city of Panama, on the seventeenth (17) day of the month of December of two thousand nineteen (2019).

LET IT BE COMMUNICATED, PUBLISHED, AND COMPLIED WITH.

THE AD-HOC PRESIDENT, THE AD-HOC SECRETARY,
Nicolás Ardito Barletta Luis Alberto La Rocca