If there has been plenty of demagoguery and self-deception to go around on all sides of this issue, the economic realities are that the Panamanian economy was sinking in unsold inventory before the virus hit us and the epidemic shattered many business plans and economic expectations. The Liberal perspective is the inevitable adjustments should be made via private agreements. Photo by the National Assembly of one of that body’s debates on the subject.
A social explosion at the end of the bank foreclosure moratorium?
by the Fundacion Libertad
Since the beginning of the pandemic, we have seen the government issue laws and decrees, supposedly aimed at protecting the population from the virus, from the economic consequences of these measures and perhaps, in their minds, protecting ourselves from ourselves.
One of these measures, perhaps one of the most applauded, but certainly one of the most misunderstood, and therefore most dangerous, has been the moratorium.
In theory, this measure has given many people the opportunity to sleep peacefully that their financial commitments would be “suspended”, not to mention that this measure could not last forever. Now we are waiting for what will happen once the banks start knocking on doors again to collect.
Meanwhile, representatives of the banking sector assure that extending the moratorium beyond June of this year would be disastrous, since it would increase uncertainty and the level of perceived risk, which in turn would harm the country’s possibilities in terms of access to financing , either through the issuance of bonds or loans from multilateral entities.
Considering the possible consequences of the moratorium, from a liberal perspective we find the Assembly’s proposal for a new extension until December irresponsible and incoherent. Passing a measure like this would only bring more uncertainty and instability for both individuals and banks. This is why we advocate the opening of private agreements between natural and legal persons and their banking entities, so that they can seek coherent solutions in accordance with the financial realities of each client, instead of authoritatively imposing measures that may well harm to the parties involved in a severe and permanent way.
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