Tailored for Panama: Offshore Banking at the Crossroads of the Americas
With the steady integration of a deregulated world of hypermobile capital, offshore banking has become an increasingly significant part of the geography of international finance. Many interpretations tend to treat offshore banking centres as identical sites of investment that can be easily substituted for one another by completely mobile, fungible capital. This paper explores the nature of offshore banking in one largely overlooked centre, Panama. It charts the historic context that led to the creation of Latin America's most important centre of international banking, emphasizing the unique qualities that stand in contrast to hyperglobalist interpretations, including the Canal and the role of the US dollar. Second, it summarizes the regulatory changes initiated in the face of global neoliberalism, including the absence of a central bank and recent reforms designed to attract foreign capital. Using primary and secondary data, the paper maps Panama's growing role as a net capital exporter, charting domestic and foreign loan markets. Finally, it also addresses the trade–offs between confidentiality, and transparency in the context of illicit activities frequently alleged to occur in offshore banking centres, which in Panama revolve around drug trafficking and money laundering. It concludes by noting that even in an ostensibly seamless world, offshore banking exhibits the place–based embeddedness of financial capital within local institutional relations.