Safe haven status starts to slip
In terms of recognition by foreigners, international finance in Panama has taken something of a back seat to its famous canal and its role as a shipping hub. But while its small stock exchange may not have inspired investors over the years, the country has made itself into a safe haven in Latin America for sovereign debt investors.
Offering tidy rates of return of 9% and above on Panama global and Brady bonds and supported by a stable, dollarized economy, the country has always been an option should things go awry in Latin America's big economies, such as Mexico, Brazil and Argentina.
Panama's propensity to borrow has also meant there has always been healthy supply. The country has around $5 billion in debt issued on international markets.
Debt getting out of hand
But this inclination to borrow could be Panama's downfall, analysts say, and could risk destroying the country's reputation as a safe haven in Latin America.