The Banking Association of Panama warns of potential effects from a debt prescription project. The association's president, Juan Carlos Gil, stated that the bill, which seeks to establish an administrative process for debt prescription, could lead to higher borrowing costs, increased risks, and reduced access to financing. According to him, this would create "legal uncertainty" and a "dual administrative burden" on the system. Banks have also expressed concern that eliminating negative entries from credit histories could create a "perverse incentive" for debtors to evade their commitments, undermining the culture of payment. The association has called for dialogue to strengthen legal security without compromising the stability of the financial system, which has allowed thousands of Panamanians to acquire housing or start a business. "While some strive to meet their obligations, others could exploit legal loopholes, weakening the conditions that today promote the stability of the financial system," the association's communication states.
Panama's Banks Warn of Risks from Debt Forgiveness Bill
Panama's Banking Association opposes a bill that would allow for the administrative forgiveness of debts, warning of higher borrowing costs, legal uncertainty, and a potential threat to the country's financial stability.
