Moisés Bartlett Quiel is a Lawyer in Panama. He is a specialist in criminal litigation, and was a legal advisor to the National Assembly and general secretary of the Municipal Council of Panama. Here are his thoughts on the bank moratorium.

What is your analysis of the agreement between the President and the banks on a moratorium until December?

It has three closely related connotations. First, the economic crisis that affects the population, a consequence of the pandemic, which limits the ability to pay financial commitments, puts homes, offices, cars, and well-being at risk. Second, the strained relationship that exists between the Executive and the Legislative, which implies leadership backgrounds, obtaining economic benefits for each and patronage. Third, the citizen demand for transparency and accountability in purchases, contracts and payrolls. This aspect has fueled the demands for resignation or separation from the position of the Minister of the Presidency. The mixture of these three events forced the Executive to pressure a situation that would oxygenate its management, among which, the agreement that moved the position of the bank was favorable, in exchange for which he is provided with funds to generate loans that yield credits to the banks themselves. In practice, there is no real sacrifice, it is a timely move that, although it does not affect the soundness of the banking system, it ensures the long-term indebtedness of citizens.

How do you analyze the reality that the moratorium does not include regular interests?

The Banking Association has said that banks live on the interest they charge for the transactions they carry out; In popular parlance, its president said, "Not charging interest is like asking the baker to sell free bread." That is legitimate and reasonable. Now, what happens is that there is a historical ballast in terms of interest collection, against external factors that impact the global economy, banks apply interest rate increases, however, when the financial cycle encourages or produces lower interest rates. Interest worldwide, banks have never benefited debtors. In this sense, there is also the expectation generated by government actors, who at this juncture sold an optical illusion in two ways, that the sacrifice involved all socio-economic sectors, and that a moratorium means non-payment of regular interest on bank obligations. Both things are false; The sacrifice is made by the citizens, in the short and long term, and we must pay the interest to our creditors.

Will the measure really end up benefiting bank debtors in the midst of this pandemic?

Banking is a business, that is how it should be understood. Let's be honest, banks have no reason to lose in their business. The measure immersed in the agreement with the Executive must be understood as a grace period that extends the fulfillment or payment of obligations, which maintains its interests and which must be honored within an extended period. Even more graphic: the term extension does not operate automatically nor is it applied to all banking clients. It is up to each bank to qualify the economic and financial situation of its clients; there is nothing objective, everything is subjective. But they are two different things. The protection of the interests of citizens and the obligation to promote the well-being of all, rests with the rulers.

President Laurentino Cortizo partially vetoed the bill that decreed a moratorium on the financial sector. How do you analyze the bill and the veto?
It should be understood that an agreement between a private association with the Executive, lacks the force of law, so it is not mandatory. If the purpose is to regulate the collection of bank interest or the internal operation of banks and expire their corporate governance, it would have to be done through a law, in this case, from our point of view, it would be unconstitutional. The objections announced by the President must be discussed and valued by the Legislative Body. That said, the spirit and letter of the bill is different from what the Executive has been promoting. I believe that the decision will be political; Today, the Assembly probably does not have the votes to pass the law by insistence, the correlation of forces within the PRD deputies, seems to have varied in the last 48 hours.

The line of credit that the Government established with the IMF in the amount of $ 515 million can be used to support the banking system for any contingency. What is your analysis of the measure?

I think it is wrong. It is understood that the $ 525 million dollars established on April 15 as a line of credit by the IMF have different purposes from that intended by the Executive. Said line of credit was provided as quick resources for health expenses and urgent balance of payment and fiscal financing needs. Everything indicates that it has been made available to the banking system to do what they legitimately do, namely, business, as explained by its president, to lend to collect interest, earn money for the transactions and services that banks dispense. Thus, the purpose argued before the executive board of the International Monetary Fund is distorted, it is not humanitarian.

The agreement between the President and the banks is positive, but it must be clear that it does not generate debt forgiveness. What is your analysis of the agreement between the Executive and the banks on a moratorium until December?

It is a positive agreement because it generates relief immediately. However, it must be clear that it does not generate debt forgiveness. In January, debtors must start their payments with new parameters and increased debt, because it seems that interest continues to be generated.

How do you analyze the reality that the moratorium does not include regular interests?

It does not include them and this represents that the debt is going to increase, and in January the capital not paid and the interest that have been generated will have to be paid. Hopefully it is clear that interest will not be generated for late payment or late payment.

Will the measure really end up benefiting bank debtors in the midst of this pandemic?

It will give people peace of mind right now. However, in January the banks will surely increase the monthly payments or increase the terms of the contracts. It all depends on the agreement that people reach with the banks. But debtors don't even know if the business or workplace will reopen.

President Laurentino Cortizo partially vetoed the bill that decreed a moratorium on the financial sector. How do you analyze the bill and the veto?

I cannot comment on the veto because we have not seen it yet. This must be analyzed by the National Assembly.

The line of credit that the Government established with the IMF in the amount of $ 515 million can be used to support the banking system for any contingency. What is your analysis of the measure?

I would like those loans to benefit the citizen more than the banks. I suggested that it be the state banks that grant loans at low interest costs of 1% or 2%, but it seems to me that they will not. Private banking does not want to lose or make sacrifices at a time when no one can think about increasing profits or profits.