Paraguay’s 1990s Bank Crash Cost Up to 13% of GDP
Paraguay paid slowly for its 1990s bank failures, through central bank money, a weaker guaraní and years of repair. Ueno Bank is the new test. The post Paraguay’s 1990s Bank Crash Cost Up to 13% of GDP appeared first on The Rio Times .
In November 1995 to 1999, Paraguay experienced a severe bank crash that cost up to 13% of its GDP, as confirmed by the central bank's intervention and the cumulative costs reported by the International Monetary Fund (IMF). Ueno Bank, an app-based lender, was taken over by the Banco Central del Paraguay (BCP) on November 2 or 3, 2026, despite Paraguay lacking a deposit guarantee fund during the 1990s.
The 1990s' bank failures involved 13 domestic banks, with the central bank providing assistance equivalent to 5% of GDP. The guaraní, Paraguay's currency, depreciated by nearly 20% and inflation soared to 14.6% by the end of 1998. In response to these challenges, Law 2334 was enacted in 2003, establishing a Deposit Guarantee Fund (FGD) managed by the BCP.
This fund covers 75 minimum monthly wages per person per institution, with payments due within 15 calendar days, extendable by another 15 days. In contrast, Ueno Bank is a single digital bank with approximately 2.9 million clients, representing about 45% of Paraguay's population of 6.46 million in 2026. The BCP initiated a resolution procedure for Ueno due to its solvency index falling below the required minimum post-adjustment.
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