Paraguay's financial landscape is set for a significant update with the Central Bank of Paraguay (BCP) officially approving a comprehensive new regulation for the risk rating of banking, financial, and insurance entities. This landmark measure aims to unify supervisory standards, enhance market transparency, and align the country's financial requirements with its recent Securities Market and Products Law, ultimately fostering a more stable and predictable economic environment.
A Unified Framework for Robust Oversight
The core objective of the BCP's Resolution N° 31 is to harmonize the rules governing Paraguay's financial system, providing clear parameters for the methodology, frequency, and public dissemination of risk qualifications. This regulation consolidates oversight for entities supervised by both the Superintendency of Banks and the Superintendency of Insurance under a single, cohesive framework, integrating them under the updated Ley N° 7572/2025. A pivotal aspect designed to ensure analytical independence is the mandated rotation of evaluation teams. Risk rating agencies must completely rotate their analyst teams and Rating Committee members at least every three years. Furthermore, a "rotating clause" ensures that when a new rating agency is contracted, no personnel who previously served the same entity in the past three years can be part of the assigned team, reinforcing objectivity in assessments.
Boosting Transparency and Informed Decision-Making
Beyond establishing independent assessment, the new regulation significantly boosts transparency and the utility of risk information. Entities are now required to update their risk qualifications annually, based on the closing information of each fiscal year, with additional mandatory updates whenever a public offering is made. The scope of these evaluations is comprehensive, extending beyond the institutional entity to include deposit instruments like savings accounts and Certificates of Deposit (CDAs), as well as public offering securities, all of which will factor into the overall entity rating. Crucially, the normativa mandates public access to this vital information: financial and insurance entities, along with the rating agencies themselves, must publish the assigned qualification details – including category, trend, perspective, methodology summary, and rationale – on their institutional websites, easily accessible to the general public. This commitment to openness seeks to foster a more predictable environment, empowering economic agents with objective data and bolstering the stability of Paraguay's financial system.
