During the summer of 2023, I had the incredible opportunity to work as an intern at MetroBank in Panama.? In this time, I gained a comprehensive understanding of the economic landscape in both Panama and the US, as well as the intricacies of banking operations and regulations.
Banks are highly regulated, for good reason, because people trust their money to be safe and accessible. Because of this, banks needed a way to ensure solvency and maintain a safe level of risk, so Basel was created. The primary goal of the Basel Committee on Banking Supervision (BCBS) was to create a prudent set of standards that regulate banks. The framework of the regulations are known as ?accords?. The accords provide guidelines and standards that focus on risk management, capital adequacy, and liquidity. This framework is used by banks all around the world and has three accords. The difference between Panama and the US is Panama still only goes by the first two, whereas the US goes by all three. In brief, Panama has not quite caught up to the standards of major first world countries.
Because the United States and Panama have different regulatory bodies and legal framework, they must have laws that cater to the way they are ran. Each country has a its own set of laws and regulations related to banking, capital requirements, consumer protection, and anti-money laundering. This is also reflected in the market focus of each country. Panama, historically, has positioned itself as an international financial center which attracts offshore banking and non-residents. As a result, the licenses in Panama reflect its focus on international financial services. This completely contrasts the United States, as they have a large domestic banking market and licenses designed to cater to activities within its borders.
Each system was designed to suit the unique needs and structure of its respective country. The Federal Reserve System?s regional banks provide local support, while Panama?s system caters to its position as an international financial center with a focus on offshore banking services. By understanding the differences, I have been able to appreciate the diversity in banking systems as well as the regulatory approaches by different countries to ensure the stability and effectiveness of their financial systems.
My experience in MetroAsset Management this summer has been incredible, as it has provided me with valuable insights to analyze industries and create portfolios. This internship has equipped me with practical skills that have allowed me to contribute to the organization through presentations with recommendations. MetroBank?s continued efforts to adapt to changing market dynamics and expand its services demonstrate its commitment to serve a diverse range of customers while being a leading banking institution in Panama.
