Paraguayan banking supervision and transparency concerns

The Association of Banks of Paraguay (Asoban) has called for greater transparency from the Central Bank of Paraguay (BCP) regarding the supervision of the national financial system. Asoban reported that while the BCP met institutional deadlines for Congressional inquiries, the information provided was insufficient to address concerns regarding credit exposure to companies linked to corporate groups. The association argued that such significant responses should carry the express approval of the BCP Board of Directors to ensure regulatory certainty.

Following these concerns, economists have also urged increased oversight by the BCP concerning the accounting deferral of banking losses. Experts noted that while deferring losses modifies the timing of recognition rather than eliminating economic risk, there is a need to distinguish between accounting treatments and a bank’s actual capacity to absorb losses. Concerns were also raised regarding inconsistent mechanisms and timelines for regulatory facilities during bank merger processes, with details often remaining in notary deeds or financial reports rather than through direct regulatory communication.