Paraguayan President Resigns After Ueno Bank Collapse Exposes Elite Capture and Leaves Millions Without Access to Funds
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The failure of Ueno Bank, which served about 60% of Paraguay's adult population, sparked protests, the removal of President Santiago Peña, and a wave of arrests involving bank and government officials amid accusations of cronyism and abuse of public money.
Ueno Bank ceased operations early Tuesday, cutting off access for millions of Paraguayans who depended on the fintech-turned-bank for everyday transactions while powerful interests had apparently been allowed to run it into the ground. The Central Bank said the institution had roughly 1.8 million depositors, while the bank itself claimed 2.9 million customers.
Protesters gathered outside the Congress building in Asunción, voicing anger over the loss of access to their money and over what many saw as a deeply rotten system of accountability. "People don't have any trust," said Elizabeth González, a 28-year-old barista, warning that the collapse of confidence among Paraguayans could also drive away foreign investors.
By Saturday, the state deposit guarantee fund had provided advance payments to about 1.2 million customers, though many remained waiting for full reimbursement and still faced the consequences of a financial failure that hit ordinary people first.
The collapse also precipitated a political crisis. President Santiago Peña, identified as a close ally of President Donald Trump, resigned on Thursday and was removed from office the following day. Prosecutors have charged Peña with breach of trust and administration for personal gain, and he is being held in pre-trial detention. Vice President Pedro Alliana was sworn in to complete Peña's term, which runs until August 2028.
Investigations revealed that Ueno Bank held significant public funds, including roughly $355 million from Paraguay's Social Security Institute, and that large loans—about $146 million—had been made to companies linked to the bank’s controlling owners, Grupo Vásquez. Economist Manuel Ferreira noted that many of the bank’s promissory notes appeared to be signed by the same parties on both sides of the transactions, underscoring the incestuous nature of the scheme.
Several senior figures have been arrested, including former Central Bank head Carlos Carvallo, who led Ueno before his appointment, and CEO Miguel Vásquez. The scandal has also drawn attention to Horacio Cartes, a former president and influential businessman, who publicly called for an investigation and withdrew political support for Peña after the damage was already done.
The fallout has raised concerns among business leaders about Paraguay’s reputation abroad. Exporter Eduardo López said the episode further erodes confidence among American partners, while students and activists on the streets called for systemic change ahead of the 2028 presidential election.