Abstract
Uruguay, in 2002, experienced a severe banking crisis that caused it to borrow about US$1.3 billion from the IMF. Relative to GDP this was the largest exposure the IMF faced. In the four years since the crisis, Uruguay has completely restructured its banking sector. Two state banks were restructured and recapitalized, four private banks were liquidated, and a new government owned bank with the good assets of three of the failed banks was created and then privatized. Uruguay also enhanced the financial safety net through the introduction of deposit insurance and legislation to broaden bank resolution powers. During this period, the IMF has provided significant technical assistance in the areas of bank supervision, bank restructuring, and deposit insurance.