The new Wall Street reforms implemented by the U.S. government are certain to make banking in Panama (and everywhere else) for U.S. citizens a lot more difficult. I have not yet confirmed this report, but based on this article in La Prensa today, the local banks are taking it seriously. The issue for them is the cost of compliance. If they must withhold 30% of all funds transferred out of their bank and report it to the U.S. government, it costs time and money and for small account holders such as U.S. retired folks, it just may not be worth it. There may be a rash of account closings and gnashing of teeth by disgruntled U.S. account holders and I don't blame them. From the photo of the democrats at the signing of the bill, they seem very pleased with it.
U.S. reforms expected to have local impact
Financial reforms in the United States could disrupt credit markets and investment in Panama, according to local industry officials.
The reforms was one of the topics discussed yesterday at the closing of the 19th National Banking Convention.
Raul Guizado, vice president of Security and Compliance with Banco General, spoke about the scope of the changes. He said that the new regulations impose certain restrictions on foreign financial institutions that have U.S. clients.
Foreign banks with these account holders have to retain 30 percent of all outgoing capital and report these transactions to the U.S. Internal Revenue Service. Guizado said that Banco General's lawyers have said that if the 30 percent is not retained, the bank will be forced to provide detailed information about the holders of the accounts.
Metrobank Vice President of Operations Rolando de Leon warned that the impact of this regulation is that it could be used as a model for other countries. He recommended that local regulators take into account the differences between the U.S. and Panamanian banking systems before proposing any similar reforms here.