Paraguay's President Santiago Peña Resigns as Lawmakers Move to Impeach Him Over Ueno Bank Collapse

Paraguayan President Santiago Peña announced his resignation on Thursday, Nov. 5, as the country's Chamber of Deputies moved to impeach him over the collapse of Ueno Bank, a fast-growing digital lender whose failure has left close to three million customers without access to their accounts, according to reporting by UPI, Euronews, The Associated Press and Americas Society/Council of the Americas (AS/COA).

"I have made the decision to submit my resignation as president of the republic," Peña said in a video address posted to his official social media account, according to UPI. Euronews reported that he cited "the stability of our country, social peace and the need to preserve our democratic institutions" as his reasons for stepping down.

Impeachment vote in the Chamber of Deputies

Peña's announcement came while lawmakers were debating impeachment allegations involving conflicts of interest, financial oversight and the handling of public funds deposited at Ueno Bank. UPI reported that the Chamber of Deputies approved impeachment charges against Peña with 78 votes in favor, while rejecting a separate effort to impeach Vice President Pedro Alliana. Euronews described the vote against Peña as unanimous.

According to the Dominican outlet Proceso, citing news agencies, a bloc of 35 deputies had filed a resolution on Wednesday seeking impeachment proceedings against both Peña and Alliana under Article 225 of Paraguay's Constitution. The filing attributed to Peña a conflict of interest stemming from his shareholding links to Ueno Holding.

The Associated Press reported that Peña is also under criminal investigation, prosecutors announced, and that he was preparing to defend himself before the Senate on Friday against possible removal from office. UPI noted that proceeding with impeachment could affect Peña's eligibility to become a senator for life, a status former presidents in Paraguay can hold, even if his resignation is accepted.

How Ueno Bank collapsed

Ueno Bank grew in about five years into a major financial player in Paraguay, with roughly 3 million customers, according to AS/COA, which said that figure represents more than 60 percent of the country's residents. The bank managed roughly $800 million in public money, just under half of which came from Paraguay's state pension and health funds, AS/COA reported.

Regulators flagged Ueno in June for risky lending, particularly to companies tied to the bank's owners, AS/COA said. After regulators investigated and corrected the bank's balance sheets, its solvency ratio fell below the legal threshold. The Central Bank of Paraguay announced on Nov. 3 that its board had unanimously approved Ueno's resolution a day earlier, after financial adjustments revealed a solvency ratio below half the regulatory minimum, according to UPI.

Customers were locked out of their accounts the following day as apps and cards stopped working, according to Proceso and AS/COA. The disruption fueled protests in the capital, Asunción. Proceso reported that the president of the Central Bank, Carlos Carvallo, resigned at Peña's request, and that prosecutors ordered the detention of eight bank executives, all of whom were taken into custody.

Peña's ties to the bank

Peña was a shareholder in a company that owned Ueno until last year, AS/COA reported, and as president he had appointed an Ueno executive to lead the central bank. Proceso reported that Peña held shares in Ueno Holding until 2025. In congressional sessions, lawmakers accused him of conflict of interest, misuse of pension funds and covering up the collapse, according to AS/COA. Peña initially denied involvement.

The crisis turned Peña's long-ruling Colorado Party against him, the AP reported. AS/COA said former President Horacio Cartes released a statement on behalf of the party encouraging Peña to resign. Peña, a former International Monetary Fund economist, took office on Aug. 15, 2023, for a term running to 2028.

In his resignation message, Peña apologized to Paraguayans. "I want to apologize to the people if I have failed them at any point. It was never my intention to betray the trust that they placed in me," he said, as quoted by AS/COA. He also said, according to UPI, that his "greatest wish is for the return of those funds to be guaranteed, for the Deposit Guarantee Fund to fulfill its purpose and for public funds and resources belonging to all Paraguayans to be protected."

International profile

Peña had positioned Paraguay as a stable, secure destination for investment and had strengthened ties with the United States. AS/COA noted that he was a founding member of U.S. President Donald Trump's Board of Peace and led Paraguay into the Shield of the Americas. The AP reported that he had been welcomed in Washington just weeks ago as a key ally of the Trump administration.

What comes next

Under Paraguay's constitutional order, Vice President Pedro Alliana, a former president of the Chamber of Deputies and former governor of Ñeembucú department, is in line to complete the presidential term through 2028. AS/COA reported that Alliana has assumed the presidency.

The new leadership faces the financial fallout of the bank's failure, which AS/COA said has included depreciated sovereign bonds and a weaker national currency, the guaraní. UPI also reported that the collapse raised concerns among international investors. According to AS/COA, Congress has already approved a new central bank president and a process to pay Ueno depositors. Millions of Paraguayans are still waiting to recover their deposits, Euronews reported.

Further developments are expected as the Senate takes up the impeachment charges and prosecutors continue their investigation into the bank and its leadership.

Sources

• UPI
• Euronews
• Associated Press
• AS/COA
• Proceso