2002 Uruguay banking crisis

rdf:langString 2002 Uruguay banking crisis

rdf:langString The Uruguay banking crisis was a major banking crisis that hit Uruguay in July 2002. In this, a massive run on banks by depositors (most of them from neighboring Argentina) caused the government to freeze banking operations. The crisis was caused by a considerable contraction in Uruguay's economy and by over-dependence on Argentina (tourism, and construction boom), which experienced a strong phase of an economic meltdown itself in late 2001. In total, approximately 1/3 of the country's deposits were withdrawn and five financial institutions were left insolvent. According to many sources, the banking crisis could have been avoided if Uruguayan authorities had properly regulated their banks. The Central Bank of Uruguay (BCU) had trusted international banks to regulate themselves properly and was too lenient and slow in responding to the crisis.