Paraguay's banks failed in waves in 1995, 1997, 1998 and 2002-03, costing about 15.7% of GDP. On 3 November 2026 the central bank took over Ueno Bank, with 2.9…
After the February 1989 coup, entry rules were loosened. Institutions grew from 88 to 147 by early 1995, many undercapitalised.
The World Bank said some banks were clearly bankrupt; 15 of 23 banks were below minimum capital at the end of 1990.
Liberalisation outran supervision: more banks, too little capital, parallel books.
Both missed clearing obligations and were intervened. Bancosur and Banco Mercantil followed; the four held about 15% of assets.
With no deposit guarantee, the BCP honoured deposits, spending close to G.700 billion, about 4% of GDP, in a year.
Law 861/96 gave supervisors new powers. Law 814/96 repaid off-the-books grey and black deposits, G.41 billion in all.
The IPS pension fund turned G.26 billion of deposits into Banco de Desarrollo shares. The bank closed anyway in 1998.
The BCP intervened Banco Union (about 8.5% of deposits), Ahorros Paraguayos and BIPSA. Union was liquidated in 1998.
From 13 June to 18 July, 9.7% of private dollar deposits left the system. Foreign banks gained almost 12 points of share.
The workers' bank BNT, fourth-largest with 6.4% of assets, was intervened in June; Banco de Desarrollo closed in September.
1995, 1997 and 1998: the home-grown collapse, step by step.
A run tied to Argentina and Uruguay's crisis began in May 2002. The BCP intervened Banco Aleman on 23 June.
Paraguay missed multilateral debt payments in early 2003. Multibanco, with about 32,000 account holders, was intervened in June.
Argentina and Uruguay's crisis crossed the border.
A Deposit Guarantee Fund covering 75 minimum wages per depositor, plus rules for resolving failing banks.
Deposit cover went from 10 to 100 to 75 minimum wages.
The cumulative direct cost of the 1995-2003 crises, mostly paid by the state.
Grupo Vazquez's Ueno got a banking licence in 2023, absorbed Vision Banco and reached nearly 3 million customers.
The BCP warned Ueno about owner-linked lending in June. In October, Fitch cut its outlook to negative.
The BCP opened a resolution after solvency fell to 5.56% against a 12% minimum. 2.9 million customers' accounts froze.
Customers, guarantees and public money at stake.
Eight people were reported detained, the central bank chief resigned, and the opposition began an impeachment push.
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