Paraguay is experiencing one of the most severe political and financial crises in recent years, with President Santiago Peña at the center of a banking scandal that threatens to prematurely end his term. The collapse of Ueno Bank, one of the country's main digital institutions, has led to the freezing of accounts for about three million customers, sparking public protests and a fierce institutional clash. On Thursday, November 5, Peña announced his resignation through a video posted on social media, but Congress decided to reject it, opting instead to proceed with impeachment. The House of Representatives voted unanimously in favor of the process, while the Senate is tasked with evaluating the charges and deciding whether to remove the head of state.
The situation originated on Tuesday, November 3, when the Central Bank of Paraguay ordered an extraordinary intervention against Ueno Bank, an institution founded in 2021 that quickly became a reference point for millions of citizens. Inspections conducted by supervisory authorities reportedly revealed an extremely compromised financial situation, with a solvency ratio less than half the minimum required by law. Facing the risk of financial collapse, the Central Bank initiated a resolution procedure, temporarily suspending account operations and preventing customers from making withdrawals, transfers, and other transactions. This decision had immediate consequences for a significant portion of the population, considering that the bank claimed to have about three million customers, equivalent to 60% of Paraguayan adults.
Investigations into the collapse have uncovered a complex network of relationships between the financial and political worlds. Ueno Bank belongs to Grupo Vázquez, a business conglomerate in which Santiago Peña himself reportedly held a stake until March 2025. The investigations focus on large loans granted to companies linked to the group's shareholders, operations suspected of irregularities and a lack of transparency in resource management. Authorities have ordered the arrest of eight people, including the bank's president and CEO. Peña is also involved in the criminal investigation, although he has not yet been summoned to testify before the magistrates. Individual responsibilities remain to be determined, and investigative hypotheses do not constitute proof of guilt.
Further complicating the situation is the position of Carlos Carvallo, governor of the Paraguayan Central Bank and former president of Ueno Bank. Carvallo led the institution from 2021 to 2023 before being appointed to head the monetary authority by Peña. As the scandal worsened, the president attempted to distance himself from the affair by requesting the governor's resignation, which he accepted but announced his intention to remain temporarily to complete the bank resolution process. The operation involves transferring sustainable activities to other institutions and liquidating residual components in an attempt to contain losses and protect the national financial system.
Meanwhile, the anger of savers has spilled into the streets of Asunción and in front of the bank branches, which remained closed after the authorities' intervention. Many citizens have demanded explanations about the fate of their money, while other demonstrations have taken place near the Parliament, where the impeachment debate has further fueled tensions. The crisis has reached particularly concerning proportions due to the exposure of public entities. According to data released by Ueno Bank in previous months, the institution managed over 700 million euros in public resources, including funds intended for the pension and healthcare systems. Among these were about 338 million euros invested by the state pension fund, a situation that has raised questions about the security of public investments and the oversight exercised by competent authorities.
To reassure the population, the Central Bank announced that in the coming days, guaranteed deposit refunds will begin, up to a maximum of 228.3 million guaraní per customer, equivalent to about 34,000 euros. According to preliminary estimates, this coverage should allow 97% of account holders to fully recover their savings. However, the situation remains uncertain for those with amounts exceeding the stipulated threshold, as there are currently no guarantees of full restitution. The national pension fund has also assured that pension payments will continue to be made regularly, announcing the transfer of accounts used by about 32,000 pensioners to another institution. The same entity has communicated its intention to take legal action to recover resources invested in the bank.
Politically, the scandal has severely damaged the image of Santiago Peña, a conservative member of the Colorado Party and former economist at the International Monetary Fund. The president, considered an ally of Donald Trump's U.S. administration, had built his credibility on economic expertise and the promise of ensuring financial stability in Paraguay. However, the collapse of a bank with which he had corporate ties has caused a rift within the majority, calling into question the support he enjoyed until a few days ago. The Colorado Party, a nearly uninterrupted protagonist of national political life since 1947, now faces a crisis that directly involves the state's leadership.
The Congress's decision to reject Peña's resignation has added complexity to the situation. In Paraguayan law, former presidents can obtain the status of lifetime senators, accompanied by particular institutional privileges. The possibility that a voluntary departure from office could allow the president to benefit from such protections has fueled political confrontation, prompting Parliament to favor the path of impeachment. Peña thus remains formally in office and will have to face the process before the Senate, which is called to rule on his potential removal.
(Associated Medias) - All rights reserved