As the economy slows down in Panama the banks begin to see the effects of too much lending. As this article in La Prensa points out, loan defaults are on the rise and the banks are being advised to tighten credit and get their balance sheets in order. This may be much higher than reported because the last statistical data comes from December. Extrapolating the data from September to December of a .7% increase we could be seeing well over 5% today.
Excerpt: According to statistics, delinquent and past-due loans accounted for 2.4 percent of the total loan portfolio held by Panama's banks in June 2008. In September, that figure rose to 2.7 percent, and in December, it increased again, to 3.4 percent.
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