Paraguay: Technical Assistance Report-Bank Resolution Framework and the Deposit Guarantee Fund

International Monetary Fund

No 2022/248, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper discusses Paraguay’s Technical Assistance report on bank resolution framework and the deposit guarantee fund. The mission identified several areas where the existing deposit guarantee fund and bank resolution framework could be enhanced. The Central Bank of Paraguay should consider developing an ongoing process of recovery and resolution planning and underpin it in its regulatory framework, in line with international modern practices Coordination with members of the financial safety net of other jurisdictions is key to ensuring adequate crisis preparedness during normal times and enabling adequate coordination of crisis management measures if there are concerns about the viability of a foreign-owned bank with operations in Paraguay. A one-voice method of communication with the public should be considered, and advance preparation is paramount to ensure a smooth process for communications in the event of a crisis situation. The resolution framework should stipulate clear and expeditious access to temporary funding, based on financial stability considerations, in situations where private sector funding has been exhausted or cannot achieve resolution objectives.

Keywords: RESOLUTION framework; resolution framework; C. Resolution tool; DGF framework; DGF coverage; Bank resolution framework; Bridge bank; Basel Core Principles; Crisis prevention; Bank resolution (search for similar items in EconPapers)
Pages: 39
Date: 2022-07-26
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