Abstract
Abstract. For many reasons, dollarization is an efficient and realistic option for this country. Yet, in order to last, it must be able to withstand banking panics without the assistance of a conventional lender of last resort and the lobby of protected industries to revoke dollarization. To this end, we advance a model of commercial banking close to that of Panama, under foreign law, and argue for free trade agreements with superpowers to smooth out real-exchange rate fluctuations.
Keywords. Country risk, Zero-trust country, Currency substitution, Irreversible reforms, Panama, Branch banking.
JEL. E02, E42.References
Ávila, J. (2004). Internacionalización monetaria y Bancaria. Documento de Trabajo No.285, UCEMA, [Retrieved from].
Ávila, J. (2010). A country-risk approach to the business cycle: The Argentine case. Documento de Trabajo No.435, UCEMA, [Retrieved from].
Ávila, J. (2011). The welfare cost of Argentine risk. Documento de Trabajo No.471, UCEMA, [Retrieved from].
Ávila, J. (2015). Antídotos Contra el Riesgo Argentino, Grupo Unión.
Goldfajn, I. & Olivares, G. (2000). Full Dollarization: The Case of Panama. Pontificia Universidade Católica, Río de Janeiro.
Hanke, S. (2002). Panama’s Innovative Money and Banking System. N.A. Barletta ed. Financial Panama, Bogotá, Colombia, Ediciones Gamma.
Informe Monetario, (2018). Informe Monetario, BCRA.
International Financial Statistics, (2016). International Financial Statistics, IMF.
Jácome, L. & Lönnberg, A. (2009). Implementing official dollarization. IMF Working Paper, IMF.
Moreno Villalaz, J.L. (1999). Lessons from the monetary experience of Panama: A Dollar economy with financial integration. Cato Journal, 18(3), 421-439.
Moreno Villalaz, J.L. (2005). Financial integration and dollarization: The case of Panama. Cato Journal, 25(1), 127-140.
Superintendencia de Bancos de Panamá, (2018). Banking regulations and supervision in Panama: From the national banking commission to the superintendency of banks. SBP.