Bank secrecy should protect customers’ financial data without preventing the Senate from learning about a bank’s condition, says Benigno López, a lawyer, former member of the board of the Central Bank of Paraguay (BCP) and former finance minister. In his view, Law 7066/2023 allows Congress to request information about capital, liquidity, transactions with related parties and prudential limits, provided that data identifying customers is excluded.
López also bases this interpretation on the Constitution, which guarantees the right to information; the public information access law; the requirement to publish financial statements; and, for banks that issue securities, the duty to disclose material information to the market. The line between what may be disclosed and what must remain confidential, he says, is between individualized and aggregate information: the law requires the BCP to respond while excluding customer data.
The debate concerns the accounting exception granted by the regulator after ueno bank absorbed Visión Banco two years ago. López argues that the measure is an administrative act, not a customer transaction, and that the BCP can explain its basis and effects on solvency indicators. He says the exception was intended to avert the collapse of an institution considered systemically important and a public loss of around US$300 million. The question, he says, is whether the risk has since fallen, stayed the same or increased.
For López, transparency is also necessary because a depositor is a creditor of the bank and, among creditors, is one of the least informed. Although depositors have coverage from the Deposit Guarantee Fund, they need to know the institution’s actual assets, the quality and liquidity of its assets, and how much it is exposed to related companies or subject to regulatory exceptions.
The former minister recalled the 1995 banking crisis, which, in his account, was marked by undeclared deposits and lending concentrated in companies owned by shareholders. Laws 489 and 861 set limits on transactions with related parties so that this exposure could be monitored. López argues that disclosing the scale and duration of excesses, and whether they have been corrected, does not require revealing the identity of every counterparty.
The Senate also cited a sale of a loan portfolio for US$35 million and another for G. 36.9 billion. López says the BCP can state whether it considered the transactions genuine sales or indirect financing to related parties without disclosing the buyers’ identities or loan details. He says that classification is a supervisory judgment about the institution, not individual customer information.
López criticized the previous practice of providing reports so heavily redacted that they became illegible. Law 7066/2023, he says, changed the rule to require a response with protected data excluded. The dispute therefore concerns the scope of parliamentary oversight of ueno bank’s condition and whether customer privacy can be protected without concealing the risks taken on by the institution holding their deposits.