# Milei's banks shift to government debt

> Argentine banks increasingly rely on government bonds as lending stalls.
- Title: Milei's banks shift to government debt · Buenos Aires Times
- Summary: Argentine banks increasingly rely on government bonds as lending stalls. Argentine banks now derive 56% of operating income from government securities versus…
- Keywords: argentina, javier milei, central bank, government debt, banking, private lending, economic policy, inflation, news, politics, world, Milei's
- Source: Buenos Aires Times — https://batimes.com.ar/news/economy/milei-fails-to-boost-lending-as-banks-load-up-on-government-debt.phtml
- Author: Ignacio Olivera Doll, Bloomberg
- Published: 2026-10-08T11:54:52+00:00
- Read time: 1 min
- Topics: argentina, javier milei, central bank, government debt, banking, private lending, economic policy, inflation, news, politics, world
## Banks prioritize government bonds
Argentine banks now earn 56 percent of operating income from government securities in July, more than three times the 17 percent from private lending.
## Banks seek liquidity amid uncertainty
Banks prioritize liquidity in uncertain economic conditions, allowing faster reactions than traditional loan portfolios.
## Milei's economic policy backfires
Milei's tight monetary policy and high interest rates drive banks toward government debt as economic growth slows.
## Credit growth stalls
Bank credit to private sector rose to 12.5 percent of GDP from 5.3 percent at end of 2023, but net interest income fell to 3 percent of operating income.
## Banks avoid credit risks
Banks face higher losses as delinquencies surge, reducing credit expansion and increasing reliance on government securities.
## Election risks heighten caution
Banks prepare for 2027 election by holding liquid securities to avoid peso volatility during political uncertainty.
## Key takeaway

Argentine banks now derive 56% of operating income from government securities versus 17% from private lending, signaling reduced banking activity under Milei's policies.