Political turmoil and social unrest are nothing new in Bolivia. Widespread poverty, high unemployment, racial discrimination, corruption and a backlash against the neo-liberal economic model implemented in 1985 are the principal causes of continuous crises and instability since 1998.
The Bolivian banking system is small compared with other Latin American countries, a reflection of the size and poverty of the Bolivian economy. In the past few years, the banking sector, made up of 13 banks, has suffered a number of blows that caused capital flight, an increase in the levels of credit defaults and a persistent shrinkage on the level of outstanding loans.