Paraguay : Financial Sector Review
The report examines the highly
vulnerable situation of the financial system in Paraguay,
which suffered from a banking crisis in 1995-98, in addition
to recent competitive devaluations of the Brazilian
currency, the fall in cotton prices, as well as the regional
economic slowdown. A major factor obscuring the reality of
banking system solvency, is the practice of substituting
needed loan provisions, with collaterals which underlie the
loans. The main issue here is the relative liquidity
absence, and delays inherent in unwinding such collateral,
as well as its potential over-valuation, making it an
ineffective substitute for cash provisions. The report
further examines banking reforms, and restructuring of the
state-owned banks, institutional and regulatory framework,
and the safety net mechanisms and deposit insurance
governing the system. It is suggested the reform of the
pension system is crucial at this juncture, given that the
current pay-as-you-go social security public pension system,
is not fiscally sustainable from an actuarial, and benefits
payment perspective, and, because the current system, even
at its best, delivers very low returns on pension investment
funds. Most importantly, for both the public, and private
systems, the investment regime should permit heavy weighting
in foreign hard currency securities.
Saved in:
Bibliographic Details
| Main Author: |
World Bank |
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| Language: | English
en_US |
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| Published: |
Washington, DC
2002-11-15
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| Subjects: | ACCOUNTING,
ACCOUNTING PRACTICES,
ACCOUNTING STANDARDS,
ACCOUNTS,
AFFILIATES,
AUTONOMY,
BALANCE SHEET,
BALANCE SHEETS,
BANK ACCOUNTING,
BANK ASSETS,
BANK BRANCHES,
BANK DEPOSITS,
BANK EARNINGS,
BANK FAILURES,
BANK INSOLVENCY,
BANK MANAGEMENT,
BANK RESTRUCTURING,
BANK RUN,
BANK SOLVENCY,
BANKING CRISES,
BANKING CRISIS,
BANKING LAW,
BANKING REGULATION,
BANKING SECTOR,
BANKING SUPERVISION,
BANKING SYSTEM,
BANKRUPTCY,
BANKS,
BENCHMARK,
BONDS,
CAPITAL ADEQUACY,
CAPITAL ADEQUACY RATIOS,
CAPITALIZATION,
CAR,
CENTRAL BANK,
COLLATERALIZATION,
COMPETITIVENESS,
CONSOLIDATION,
CONTAGION,
COUPONS,
CREDIT RISK,
CURRENCY ASSETS,
CURRENCY DEVALUATIONS,
DEBT,
DEBT SERVICING,
DEFICIENT BANK MANAGEMENT,
DEMAND DEPOSITS,
DENOMINATED LOANS,
DEPOSIT INSURANCE,
DEPOSITORS,
DEPOSITS,
DEVALUATION,
EARNING ASSETS,
ECONOMIC GROWTH,
FINANCIAL ENGINEERING,
FINANCIAL INTERMEDIARIES,
FINANCIAL RATIOS,
FINANCIAL SECTOR,
FISCAL YEAR,
FOREIGN BANKS,
FOREIGN CURRENCY DEPOSITS,
FOREIGN EXCHANGE,
GDP,
GROSS DOMESTIC PRODUCT,
ILLIQUIDITY,
INSOLVENT BANKS,
INSTITUTIONAL DEVELOPMENT,
INSURED DEPOSITS,
INTER AMERICAN DEVELOPMENT BANK,
INTEREST RATE,
INTEREST RATES,
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT,
INTERNATIONAL RESERVES,
LENDER OF LAST RESORT,
LIQUID ASSETS,
LIQUIDATION,
LOAN LOSS PROVISIONS,
M2,
M3,
MATURITIES,
MONETARY AUTHORITIES,
MONETARY INDICATORS,
MONEY SUPPLY,
MORAL HAZARD,
MORTGAGES,
OPEN MARKET OPERATIONS,
PENALTIES,
POLITICAL INTERFERENCE,
PORTFOLIO,
PORTFOLIOS,
PROFITABILITY,
PROPERTY OWNERSHIP,
PRUDENTIAL REGULATIONS,
PUBLIC BANKS,
RATING SYSTEM,
REGULATORY FORBEARANCE,
RESERVE REQUIREMENT,
RESERVE REQUIREMENTS,
RETURN ON ASSETS,
RISK MANAGEMENT,
RISK WEIGHTED ASSETS,
SAVINGS,
SAVINGS DEPOSITS,
SECURITIES,
SECURITIZATION,
STATE BANKS,
STATE OWNED BANKS,
SUPERVISORY AUTHORITIES,
T-BILLS,
TRADE SHOCKS,
TRADING,
VALUATION FINANCIAL SECTOR; MACROECONOMIC ADJUSTMENT; FINANCIAL ANALYSIS; FINANCIAL INDICATORS; BANKING CRISES; CURRENCY DEVALUATION; COTTON PRICES; REGIONAL ECONOMICS; BANKING REFORMS; COLLATERAL; LIQUIDITY (ECONOMICS); BANKING REFORM; RESTRUCTURING; STATE-OWNED BANKS; INSTITUTIONAL FRAMEWORK; LEGAL & REGULATORY FRAMEWORK; SOCIAL SAFETY NETS; DEPOSIT INSURANCE; PENSION REFORM; PAY-AS-YOU-GO SYSTEMS; FISCAL CONSTRAINTS; PENSION FUNDS; INVESTMENTS; FOREIGN INVESTMENTS; FOREIGN SECURITIES, |
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| Online Access: | http://documents.worldbank.org/curated/en/2002/11/2083430/paraguay-financial-sector-review
https://hdl.handle.net/10986/13878
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