Alberto Acosta Garbarino, president of Banco Familiar and the organization Desarrollo en Democracia (DENDE), warned that the Banco Master scandal in Brazil — considered the largest banking fraud case in the neighboring country's history — bears similarities to the 1995 banking crisis in Paraguay, when 11 banks and 27 financial firms were shut down, affecting 200,000 depositors and costing the country approximately $137 million.
The businessman drew attention to the discretionary handling of investment funds and the unethical business models at some local firms, as well as the close ties between their executives and politicians and officials linked to corruption cases. Acosta Garbarino warned that if past mistakes are not taken into account and proper measures and controls are not implemented, something similar could happen again in Paraguay.
Banco Master, a financial institution owned by Daniel Vorcaro, was placed into extrajudicial liquidation by the Central Bank of Brazil amid suspicions of multimillion-dollar fraud. Gabriel Galípolo, the head of the Brazilian central bank authority, explained that the institution's main problem was the way it used funds raised through investments guaranteed by the Credit Fund, a mechanism similar to an insurance policy for savers that gave confidence to investors and allowed the entity to receive large volumes of money. Mismanagement of funds and flaws in the business model were detected.
Galípolo acknowledged signs of economic difficulties and financial pressure but stated that the episode does not pose a serious threat to the entire Brazilian financial system. Following the scandal, the Central Bank of Brazil began applying stricter control measures and regulatory adjustments to prevent the recurrence of similar schemes.
Economist Víctor Raúl Benítez detailed that the alleged fraudulent operations detected amount to around 12 billion reais, or $2.2 billion, and that approximately 1.6 million people are believed to have been affected. Brazil's Credit Guarantee Fund has already reimbursed approximately 39 billion reais in deposits and investments to affected savers.