Paraguay banking association demands technical dialogue on financial regulation

The Paraguayan Banking Association (Asoban) has voiced strong concerns regarding the regulation of the financial system, warning that implementing new rules without prior technical dialogue with the sector introduces uncertainty and can undermine confidence. Osvaldo Serafini, president of Asoban, emphasized that while the banking system is robust, with deposits surpassing G. 190 trillion and a credit portfolio of G. 187 trillion (approximately US$31 billion), its stability relies on clear, predictable regulations.

During the 2nd Banking Convention, Serafini highlighted the sector's strong solvency levels of 12.5% and sufficient liquidity to absorb external shocks. He attributed this strength to "prudent decisions sustained over time, serious supervision, and the commitment of each entity to the solidity of its balance sheet and financial stability." However, he cautioned that imposing caps or tariffs without considering affected parties poses risks.

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When that happens, signals are projected to the market that do not necessarily relate to the real strength of the institutions, affecting the clarity and confidence that the regulatory framework should characterize.

Serafini stressed that financial regulation, when developed through constant and open technical dialogue between regulators and the regulated, further strengthens trust and helps anticipate risks. The absence of such structured dialogue, he argued, sends market signals that may not reflect the institutions' true strength, thereby affecting the clarity and confidence required in the regulatory framework. Asoban also called for the protection of the Central Bank of Paraguay's (BCP) independence and credibility, underscoring the importance of maintaining trust in the institution.

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This strength is not by chance, nor a gift from heaven. It is the result of prudent decisions sustained over time, of serious supervision, and of each entity's commitment to the solidity of its balance sheet and financial stability.