PARAGUAY'S CENTRAL BANK PRESIDENT RESIGNS

UNCLAS ASUNCION 000458

SIPDIS

DEPT OF TREASURY WASHDC
DEPT OF COMMERCE WASHDC
DEPT OF JUSTICE WASHDC
NATIONAL SECURITY COUNCIL WASHINGTON DC
USSOUTHCOMMAND MIAMI FL

STATE FOR WHA/BSC, WHA/EPSC, EB/IFD/OMA
STATE PASS TO USTR FOR SCRONIN, LYANG
TREASURY FOR OSIA MAUREEN WAFER
COMMERCE ITA SARAH COOK
NSC FOR MIKE DEMPSEY
SOUTHCOM FOR POLAD
USAID FOR AA/LAC ADOLFO FRANCO

E.O. 12958: N/A
TAGS: ECON EFIN EINV PGOV PREL PINR PA
SUBJECT: PARAGUAY'S CENTRAL BANK PRESIDENT RESIGNS
AFTER SHOOTING INCIDENT



1. Angel Gabriel Gonzalez Caceres, the President of
the Central Bank of Paraguay, resigned on April 4 after
coming under fire for a shooting incident at his home
on March 30. Gonzalez faces a criminal investigation
into the incident and although he said he doesn't fear
the outcome, he also deemed it inappropriate for the
BCP president to be subject to a judicial
investigation. Local analysts, including the resident
representative of the IMF, do not anticipate any
significant policy changes.


2. On March 30, near midnight, a group of retired
bankers angry over pension cuts showed up in front of
Gonzalez's house with a mariachi band, which proceeded
to play a Mexican song called "The King." According to
the protesters, Gonzalez emerged from his house wearing
a bulletproof vest and carrying a handgun. While their
versions differ, both the protesters and Gonzalez
acknowledge that a shot was fired. One protester
reportedly went to the hospital complaining of hearing
damage and a public prosecutor is investigating.
Gonzalez said repeated protests, some with coffins
bearing his name, were traumatizing his children, but
apologized for his conduct.


3. Some Embassy contacts at the Ministry of Finance
expressed relief at the departure of Gonzalez, whom
they viewed as a micromanager who had over-personalized
the position of central bank president. The interim
President will be Venicio Sanchez, the longest-serving
member of the Board of Directors. Gonzalez will be in
vacation status until President Duarte issues a decree
accepting the resignation. President Duarte will
nominate a permanent replacement, who must then be
approved by the Senate. The normal term for a BCP
President is five years. Most past BCP Presidents
have been technocrats rather than politicians, but
President Duarte's choice of nominee will be
instructive.

KEANE