Paraguay’s Senate removed President Santiago Peña on November 6 after Ueno Bank’s collapse raised questions about political accountability and financial oversight.
A fast-growing bank runs short
Ueno grew from a digital finance company launched in 2021 into a bank with about three million customers—roughly 60% of Paraguay’s adults—and hundreds of millions of dollars in public funds. On November 2, the central bank began winding it down after account adjustments showed its solvency ratio had fallen below half the legal minimum. Customers immediately lost access to accounts, cards and payments.
Before the intervention, regulators had questioned loans to companies linked to Ueno’s controlling group and ordered the bank to bring those loans within legal limits. Later accounting adjustments showed a deeper capital shortfall. Questions were also raised about loan records and assets listed without enough support.
Why the crisis became political
Ueno held about $800 million to $850 million in public funds, including roughly $380 million associated with Paraguay’s state pension and health fund. Peña had held a stake in Grupo Vázquez, Ueno’s parent company, until March 2025, according to his own account; he and the bank deny wrongdoing. Carlos Carvallo, who led the lender before Peña appointed him central-bank chief in 2023, also came under scrutiny. Impeachment accusations included conflicts of interest, mishandling public funds and oversight failures. These are allegations, not proof of criminal guilt.
Depositors struggled to access savings, wages and pension payments, and protests followed. Peña’s Colorado Party turned against him after party leader and former president Horacio Cartes withdrew his support. The lower house voted 78–0 to impeach Peña. All 44 senators present voted to remove him, even though he had offered to resign the day before. Opposition lawmakers said resignation could leave him with the privileges of a lifetime Senate seat; Peña said he had not been given enough time to prepare his defense.
What Alliana must address
Vice President Pedro Alliana has taken office and is due to serve the rest of Peña’s term, through 2028. He belongs to the same party and served in Peña’s administration, preserving continuity but not resolving questions about regulators’ independence. Alliana has promised full compensation for affected customers, and deposit-guarantee advances had begun. Those payments do not mean every account has been restored or the public funds exposed at Ueno recovered.
Prosecutors are investigating the bank’s collapse, and Peña was ordered to appear before them. Those proceedings are separate from the Senate’s decision. Regulators must account for Ueno’s assets and liabilities and explain how depositors will be repaid. Restoring confidence will also require credible oversight and a clear account of how the fast-growing lender failed.