finance

Banking meeting begins in Panama

david mesa/la prensa

common sense: Banking leader Fernando Pozo said that more cooperation is needed to prevent future economic meltdowns.1119433

To no one's surprise, the global economic crisis dominated discussions during yesterday's opening of the Latin American Federation of Banks' annual meeting in Panama City.

The organization's president, Fernando Pozo of Ecuador, said that the crisis seemed to be caused by lending practices in the United States, and that banks in this region seem to have emerged unscathed so far.

“I think that it is important to identify what type of regulations institutions in Latin America need,” Pozo said.

The organization represents more than 500 banks and financial institutions from 19 countries. Pozo told the industry leaders that many banks seem well prepared to weather the current economic storm, as banks in the region seem to have enough cash on reserve.

Pozo also recommended that governments adopt a “counter-cyclical economic policy,” which would be conserving resources in bountiful periods so that they have money to spend when the economic climate turns sour.

“Countries that have surpluses can use them to minimize the impact when there is a crisis,” he said.

With regard to the G-20 meeting of heads of state that took place over the weekend in Washington, Pozo said that the governments of the world's leading economies must work together to address the current financial crisis.

At that meeting, the world's leaders pledged to act on several fronts, including the supervision of markets and the reform of the International Monetary Fund.