Panama's banking sector has called for the creation of an emergency liquidity fund and the idea is currently being studied by financial regulator SBP, El Capital Financiero reported.

The fund would be created only to assist banks during emergencies and would not be used to maintain required liquidity levels, Carlos Troetsch, head of banking association ABP told the publication, adding it could be established before the end of 2018.

According to the report, state-run Banco Nacional de Panamá has agreed to provide $500 million to the fund, in the form of a central bank discount window. A discount window allows institutions to borrow money from the central bank to meet temporary liquidity shortages.