Paraguayan Senate impeaches President Santiago Pena amid Ueno Bank collapse
The collapse of digital lender Ueno Bank left millions of Paraguayans unable to access their savings and prompted the Senate to impeach President Santiago Pena, installing Vice-President Pedro Alliana as his successor.
A rapid expansion and subsequent failure of Ueno Bank, a digital lender controlled by the Grupo Vazquez conglomerate, has left nearly three million Paraguayans without access to their deposits. The central bank placed Ueno under its control on Nov. 3 after regulators found a sharp deterioration in its capital adequacy and lending quality, prompting the transfer of deposits to other banks.
According to Reuters, the bank managed about $850 million in public funds, including roughly $380 million held by state pension and healthcare schemes. The crisis affected around 32,000 retirees who received pension payments through the institution. The government approved a guarantee fund to repay stranded depositors within five business days, and initial payments to smaller accounts began on Nov. 5.
President Santiago Pena, an economist who previously worked for the International Monetary Fund and served as finance minister, announced his resignation on Nov. 5, citing the need to preserve stability. Lawmakers rejected the resignation and, on Nov. 7, the Senate voted unanimously to impeach Pena on grounds of misconduct linked to the bank’s collapse. Vice-President Pedro Alliana was sworn in as president for the remainder of the term, which runs until Aug. 2028.
Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud, and six executives, including founder Miguel Vazquez and bank president Juan Manuel Gustale, were ordered jailed pending trial. Former central bank chief Carlos Carvallo was also placed under house arrest.
"The intervention was necessary to protect depositors and the stability of the financial system," a central bank spokesperson said.
Public protests erupted in Asunción as depositors demanded access to their money, while opposition lawmakers argued that accepting Pena’s resignation could grant him a lifetime Senate seat and legal immunity. The impeachment removes that possibility and opens the path for criminal proceedings.