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Panama bank regulator extends intervention at AllBank for 30 days

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Panama bank regulator extends intervention at AllBank for 30 days

Panamanian banking regulator SBP has extended its administrative intervention at troubled AllBank Corp. for 30 additional days, after the expiration of the term indicated in a Sept. 9 resolution.

The extension of the measure, which took effect on Oct. 9, does not entail a contagion risk for the banking system, since AllBank has no interbank relations with the rest of the sector, the SBP said.

The regulator decided to intervene AllBank on Sept. 9, after the company's parent, Venezuela-based Banco Occidental de Descuento Banco Universal CA, closed Banco del Orinoco NV, an offshore affiliate in Curaçao. Regulators previously carried out an "emergency measure" that suspended the operations of Banco del Orinoco due to the bank's "deficiencies."

According to a report from EFE, approximately a quarter of AllBank's liquid assets and a third of its portfolio investments were placed in Banco del Orinoco, which is what led the Panamanian regulator to freeze the bank's funds.