Could Paraguay’s banking crisis spill over into Argentina?

When Pablo Casas woke up in Buenos Aires on Tuesday, November 3, he soon discovered that he had been suspended from his job for a month.

For just over two years, he had worked in the Observability department at IT systems company ITTI, which provided support to the Grupo Vázquez holding company, primarily Ueno Bank.

In recent days, the Paraguayan-origin bank has become a central figure in a financial crisis in Argentina’s neighboring country. The crisis led to a freeze on customers’ savings and triggered impeachment proceedings against President Santiago Peña.

Casas is one of approximately 1,000 workers based in Argentina who were responsible for providing IT services to the conglomerate.

They were part of ITTI’s largest division. The company also has employees in Brazil, Colombia, Chile, Mexico, Peru, Uruguay and Bolivia, as well as Paraguay, who are now facing a similar situation.

“Early in the morning [on Tuesday], they shut down all of the bank’s operations without saying anything, without any communication from management, and without explaining why,” Casas told the Herald.

The only explanation came in an email from Human Resources stating that “all communication channels were available” for employees to contact them.

However, that did little to reassure them. “We don’t really know much either,” was the response Casas received from HR.

Leandro Vildoza, another Buenos Aires-based employee who was suspended, told the Herald that he first learned of the problems facing the holding company the previous Monday through news reports from Paraguay.

That day, all scheduled meetings were canceled, while all communication channels used by employees, including Slack and Gmail, were silenced. Access to the offices was also prohibited. “It was like a day when they declare a mandatory public holiday,” he said.

It was not until Thursday morning that they were formally notified of their suspension by Kaitel SRL, a company subcontracted by ITTI to handle its operations in Argentina.

“As a consequence of the resolution and intervention proceedings involving Ueno Bank, ordered by the Central Bank of Paraguay and publicly announced on November 3, 2026, an extraordinary situation has arisen that severely affects the availability of the financial resources necessary for the Company’s normal operations,” the email stated.

“In particular, the operational and financial restrictions resulting from this measure have affected the Company’s usual financing mechanisms, leading to the temporary suspension of its activities,” the message added.

Casas said the decision also affected employees who were on vacation, as well as others on medical leave, whose leave was also suspended.

Vildoza, however, pointed out that the notice “has no legal backing,” arguing that the company cannot suspend employees without justification and without formally notifying them through a certified legal letter.

There is another problem: the company has yet to pay their October salaries, which were normally deposited partly in Argentine pesos and partly in U.S. dollars.

Both employees told the Herald that they are considering taking collective legal action over the unpaid wages — an effort they hope to coordinate with workers in other countries — as well as over the way their suspensions were handled.

“The idea is precisely to begin that process next week,” Vildoza said. He added that one of their main concerns is whether their health insurance coverage will remain in place.

“The email says they are supposedly going to maintain health coverage, but we have no idea whether that’s actually true,” he added.

Warning signs and an attractive promise Casas said tensions began building in July of this year, amid the FIFA World Cup, when employees were asked to cut expenses. That was followed by layoffs affecting approximately 200 employees in Argentina and an undetermined number in Paraguay.

Reports began appearing in the Paraguayan press questioning the company’s solvency and criticizing the Central Bank of Paraguay’s inaction on the matter.

“That prompted Miguel Vázquez — the founder of Ueno Bank — to speak out several times, saying that all of it was just rumors, that the company was completely solvent and that everything was running quite smoothly,” Casas said.

He added that the holding company’s executives communicated with employees through video calls during which “we obviously had no say, except for perhaps asking a question through Google, which they might answer.”

Vildoza said the suspended employees had unsuccessfully tried to contact ITTI’s Head of People in Argentina, Pilar Camacho, and the country’s Senior Manager of Payroll, Roxana Corrales.

“They resigned, and they were two of the people who knew about this situation and who, at least, managed to negotiate their departure from the company,” he said.

He stressed that employees had no knowledge of “everything that was being planned behind the scenes.”

He recalled: “Everyone on the team that had been built over the past two years believed in the ambitious project that was underway.”

According to him, Ueno Bank had promised to “bring technology to Paraguay.” In other words, “to develop in Paraguay what we have here in Argentina: a PedidosYa, a Rappi or an Uber, but under different names.”

“Everyone who worked at ITTI came from major companies, and we thought the project was spectacular. We never imagined this would happen,” he said regretfully.

Could the crisis have a financial impact on Argentina? The situation has hit Paraguay hard in recent days. The country’s sovereign risk index rose by 25 basis points, from 119 to 144 points, a 21% increase.

The financial impact was also reflected in a depreciation of the national currency, the guaraní. Since October 28, the U.S. dollar has risen 12%. On Thursday alone, the dollar gained 5.4%.

Despite this, economists consulted by the Herald are not concerned that the volatility could spill over into Argentina, as happened, for example, following the unexpected victory of Inácio Lula da Silva in the presidential runoff election in late October.

Pablo Repetto, Head of Research at Argentine brokerage firm Aurum Valores, told the Herald that “what happened in Paraguay has a very specific, country-specific component” that is not present in Argentina.

“There is no such pronounced concentration of deposits in a handful of activities within a single institution,” he explained. He added that Argentina has a more decentralized banking system: “It seems to me that it is a much less concentrated system.”

Economist Gustavo Ber reached a similar conclusion: “I don’t think it will spill over into Argentina, since local banks have solid financial indicators,” he told the Herald.