Paraguay Bank Crisis
Paraguay Bank Collapse: Peña Faces Senate Impeachment After Ueno Crisis and Resignation
Paraguay’s political crisis around the collapse of digital lender Ueno Bank moved into a new phase Thursday and Friday: President Santiago Peña submitted his resignation, the lower house advanced impeachment, and lawmakers rejected an effort to impeach Vice President Pedro Alliana — clearing a path for Alliana to succeed Peña if the Senate removes the president or accepts the resignation, according to the BBC, The Guardian and Xinhua.
This article summarizes news reporting and is not financial advice.
What happened to Ueno Bank?
The Central Bank of Paraguay ordered Ueno into resolution over insolvency early in the week, freezing deposits for about three million customers — roughly 60% of the country’s adult population, the BBC and The Guardian reported. Apps, cards and transfers stopped. Protesters filled streets near Congress demanding accountability.
Ueno grew rapidly after Grupo Vázquez bought the former finance company in 2021 and won authorization under Peña’s government to operate as a digital bank at the end of 2023, The Guardian reported. It attracted customers with cash-back grocery offers and sponsored Paraguay’s national soccer team. The bank came to hold about $800 million to $850 million in deposits from state and pension entities — roughly a quarter of its deposits — drawing conflict-of-interest criticism because Peña had been a shareholder in the owning group until early 2025, The Guardian said. Peña has said he disposed of his shares and denied wrongdoing.
Congress approved a process to repay depositors, and a new central bank president was appointed, the BBC reported.
Resignation, then impeachment
In a video Thursday, Peña apologized if he had failed the public and said he was resigning to protect stability and democratic institutions, the BBC and Guardian quoted. Paraguay’s constitution requires Congress to accept a presidential resignation. A special session on the resignation was adjourned in favor of continuing impeachment, the BBC reported.
The Chamber of Deputies unanimously launched an impeachment trial alleging misconduct and conflicts of interest tied to Ueno, The Guardian reported. About an hour after the resignation video, the lower house sent the case to the Senate. The BBC said Congress scheduled a special session for Friday at which Peña was expected to present a defense; Peña posted on X that he would appear to “exercise my right to a defence” and that citizens deserve the truth “without cover-ups.”
If the Senate convicts him even after the resignation attempt, he would lose a Senate seat and parliamentary immunity and could face ordinary courts, The Guardian explained.
Alliana cleared by deputies
Xinhua reported that the Chamber of Deputies on Thursday rejected a motion to put Vice President Pedro Alliana on impeachment trial, voting 30-48. Alliana is next in line for the presidency. Opposition lawmakers had accused him of helping shield information about the bank crisis and of backing deposits of social-security funds at Ueno; he has denied wrongdoing in prior reporting. The BBC noted the Colorado party dropped impeachment proceedings against Alliana.
Former president Horacio Cartes, once a Peña ally, publicly endorsed impeaching Peña, The Guardian reported, intensifying pressure inside the ruling Colorado party.
FAQ
Why did Paraguay’s bank collapse matter so widely?
Ueno held accounts for millions of ordinary customers plus large public and pension deposits, freezing access to daily money when the central bank intervened.
Is Peña still president?
As of the BBC and Guardian reporting Thursday night into Friday, his resignation awaits congressional handling while a Senate impeachment path continues; status can change quickly with Friday’s session.
Earlier coverage: Paraguay's Santiago Peña Resigns After Ueno Bank Collapse Freezes Millions of Accounts (Nov 5)