Panama as a "Safe Haven"
(buyingrealestateinpanama.blogspot.com) With so many of the world's economies in trouble, I thought it might be prudent to give you some facts about why Panama is worth a long hard look as a "safe haven". The Sovereign Society is an organization dedicated to helping people protect their assets, their rights and their privacy. In an October, 2008 post, the society reiterated its oft repeated endorsement of Panama as "the ideal place for retirement, a second home, or even to house your offshore asset protection trust or family foundation. It's one country in this turbulent world that is proud to be known as a tax haven.
As my previous post illustrates, Panama's mortgage industry has and continues to be both traditional and conservative in its lending practices and this is the result:
Reuters (Oct. 13, 2008) "Panama's banks are flush with liquidity and well placed to weather the international credit crisis.
The country's banking superintendent--Olegario Barrelier--says liquidity in Panama's banking center stands around 58%. Plus they have manageable exposure to the international markets that have been pummeled by the U.S. credit crisis.
'At the moment our banks are good, very good. They are healthy, they are liquid, capital is nearly double what is required. They are being financed by local deposits and are not dependent on external financial markets,' he said."
Sovereign society goes on to explain that "Panama has long been a center for offshore banking where the U.S. dollar has been the official currency for more than a century.
Panama is home to 90 banks, nearly 40 of which are international. That makes Panama Latin America's largest banking center outside of Miami, (which it is rapidly overtaking in assets). Among the major banks are HSBC, Citigroup and BBVA.
With no central bank, no federal reserve and no government lenders of last resort, banks in Panama have been encouraged to stay highly liquid, which they have.
These banks maintain a solid 58% loan to holdings ratio which put them in a strong position. Compare that to U.S. banks that have had to resort to billions in federal bailouts to stay afloat."
In the article, Superintendent Barrelier goes on to say that while he acknowledges that Panama will not entirely escape the impact of global financial crisis, he expects it to slow, but not crush the Republic's economy. For more than a year Panamanian banks have been encouraged to tighten credit to curb inflation, which they have done.
We aren't expecting to see a "big year" in real estate transactions, but we are expecting that many in less fortunate economies will take a serious look at Panama and consider its numerous advantages. Panama continues in its strong commitment to banking that maintains high standards of fiscal responsibility, its belief in an individual's right to privacy in banking and support for an investor-friendly tax code to encourage economic growth.
