Panama banks liquid as global crisis rages - government

By Andrew Beatty

PANAMA CITY, Oct 13 (Reuters) - Panama's banks are flush with liquidity and well placed to weather the widening international credit crisis, the country's banking superintendent told Reuters on Monday.

Olegario Barrelier said liquidity in Panama's banking sector stands at around 58 percent of deposits, with manageable exposure to international markets pummeled by the U.S. credit crisis.

"At the moment our banks are good, very good. They are healthy, they are liquid, capital is nearly double what is required. They are being financed by local deposits and are not dependent on external financial markets," he said.

Long a center for offshore banking, dollarized Panama is home to almost 90 international banks, making it one of Latin America's largest banking centers.

HSBC (HSBA.L), Citigroup (C.N) and BBVA (BBVA.MC) are among Panama's biggest banking players.

With no central bank or lender of last resort, Panama's banks have been encouraged to stay highly liquid.

Barrelier said the global crisis would eventually hit Panama, but that the effect would likely be a slower economy rather than damage to the financial system.

Since January banks in Panama have been encouraged to tighten credit to cool spiraling annual inflation, which is near 10 percent.

The economy is expected to post a growth of 9.5 percent this year.