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Panama's banking regulator has named César García as the new liquidator of Banco Disa, an official from the watchdog confirmed to BNamericas.
García will replace Olegario Barrelier, who was appointed as superintendent on August 7 after President Martín Torrijos asked Delia Cárdenas to step down.
Torrijo's decision was widely criticized as Cárdenas was recognized for promoting better practices, transparency and fighting money laundering.
Panama reformed its banking legislation in 1998. Under the new framework, the head of the watchdog is named for a five-year term, renewable once, that does not coincide with the presidential term.
The last point was key to avoid political influence on the banking watchdog, which is why Torrijo's decision undermined the country's institutionalism, Roberto Eisenmann, president of Transparency International's Panama unit, told BNamericas.
In November 2001, the local authorities intervened investment bank Banco Disa and closed it down in January 2002.
Five years after the collapse of Banco Disa depositors are still waiting to be reimbursed and it is still unclear how much of the funds have been recovered.
According to an International Monetary Fund (IMF) document, Disa's forced liquidation resulted from the discovery of undisclosed off-balance liabilities that could not be supported with existing assets. Investment losses from Latin American securities during 1996-98 exceeded the bank's equity.
The bank had assets equivalent to 1.2% of Panama's GDP.
Businessman Joaquín José Vallarino was the main shareholder of Disa Securities, the holding company that owns Banco Disa.
Legal documents regarding the collapse of Banco Disa are closed to the public, which is usual in Panama, sources within the industry told BNamericas.
The Disa collapse and the never-ending legal wrangling is an illustration of the lack of transparency in Panamanian courts and banks, the sources said.
The banking regulator's office and Banco Disa gave no comments when contacted by BNamericas.