Paraguay is not only going through an economic turbulence, as a result of the external winds that hit production, but also through a political one, which does not hesitate to play dirty, at the cost of financial stability. This time, the Central Bank of Paraguay (BCP) is in the sights of a political sector of the Senate, which summoned the head of the parent bank, José Cantero, and members of the board of directors, to give explanations on reports of two cases protected by the called bank secrecy or duty of secrecy. This could seriously undermine the institutionality of the BCP.
It is known that the macroeconomic and financial stability that was built over decades, and throughout different periods of government, and the confidence that it will be maintained as a State policy, is one of the country’s main assets.
In this framework, the fundamental principle that constitutes one of the pillars of trust and development of the financial system is the duty of secrecy. The serious countries that have developed a solvent and stable financial system that allows long-term savings to be formed and that is a vehicle that channels savings to investment, sustained trust and credibility in the system based on the duty of banking secrecy.
Having said that, the convocation of the Senate and more specifically of referents from the Guasu Front to the BCP authorities could put the credibility of the parent company at risk, and the fact could even be considered as a threat to its institutionality, in accordance with the duty of secrecy.
This principle is nothing more than the obligation that both financial institutions and Central Banks have to protect the personal information of their clients and citizens, respectively, and especially about the money they deposit in them and the information collected by the parent bank in the framework of its functions on said citizens.
The “duty of secrecy” has two facets: the first, the right of the citizen (depositor/bank client) that their information not be disclosed unless there is some specific cause for disclosure established by law that enables disclosure of the information. information; the second, the obligation of the administrators/employees of the banks and officials of the Central Bank of Paraguay to preserve and maintain that confidentiality.
Such is the degree of the duty of these people, that their non-compliance can not only lead to labor or administrative consequences (sanctions), but even entails the commission of the punishable act of violation of professional secrecy.
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It should also be mentioned that this “duty of secrecy” is a principle of international standard, which exists not only in order to protect the particular interest in the privacy of individuals (a principle that is constitutionally protected in Paraguay), but to protect the economic system itself. -Financial, since this concept emanates directly from the trust that customers place in financial institutions.
A trust that constitutes the basis of the functioning of the system, and that translates into the levels of deposits, in the flow of capital into the country through the banking system and, finally, in the availability of resources to finance economic development.
This duty has, therefore, the obligation to protect both the person and the proper functioning of the financial system. Regarding the individual aspect, the protection of the intimacy of the people is enshrined in the National Constitution itself, and has to do with the necessary reservation about the background of the citizens who are in the hands of the banks, and that is not another something that the inviolability of the right to privacy of individuals.
From the point of view of the financial system, it would violate the main asset of the banking business, which is the confidence of citizens that both their deposits and their privacy will be protected, both by the banks and by the Parent Bank. There are many examples, in the world and in the country, of what happens when trust in the system is lost.
From the legal point of view, the fundamental principle of the “Duty of Secrecy” is enshrined in Law No. 489/95 article 6 “… the information, data and documents of third parties held by the Central Bank of Paraguay , by virtue of their functions, are of a reserved nature, unless otherwise provided by law”.
The Central Bank and those who work there have, therefore, the moral, institutional and legal obligation to strive in all instances for compliance with this principle, because otherwise they would be violating their own Organic Charter and the National Constitution itself, and they would not be defending what is one of their main mandates, the stability of the system.
As explained above, it is not a case in particular, but one of the pillars of the stability of the financial system, so a choice must be made between eliminating the “Duty of Secrecy”, making, in fact, public the information of savers and damaging confidence in the system, or preserving a principle that has been a fundamental axis in the development of the financial and economic system in the world.
In this scenario, it is important to note that the temptation to perform for the grandstand may be popular, but the results may be dire for the future of the economy.
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La Nación / Convocation of the Senate to the head of the BCP threatens the institutionality of the parent bank