Paraguay's president removed after Ueno Bank collapse leaves 2.9 million savers cut off

Bank seizure sets off the crisis

The central bank took control of Ueno Bank on Tuesday, 3 November, after finding that its solvency had fallen far below the legal minimum. The lender was a digital bank used by more than half of Paraguayan adults, and the Financial Times puts the number of people now unable to reach their savings at 2.9 million. Pensions, money for medicine and household bills were suddenly out of reach, and public funds held at the bank, including social security money, were caught up in the collapse. Carlos Carvallo Spalding, who had led Ueno before taking over the central bank, resigned that week and was also detained.

Peña's resignation and removal

Santiago Peña, a former IMF economist who had served as finance minister from 2015, offered to resign on Thursday, 5 November. A resignation would have made him a senator for life with immunity from criminal proceedings, but Congress refused to accept it and pushed ahead with impeachment instead. Peña had asked for a 72-hour delay, which was refused, and was given half an hour to prepare his defence. On Friday, 6 November, the Senate voted unanimously to remove him, and minutes later he was placed under house arrest. Vice president Pedro Alliana took over the presidency, and Peña became the third Paraguayan president removed from office since the end of Alfredo Stroessner's dictatorship in 1989.

Investigations and allegations

Prosecutors opened three investigations linked to Ueno and issued arrest warrants for eight members of the bank's management, including its president. Peña is under investigation over his oversight of the bank and the public money deposited there, and he is suspected of breach of trust, embezzlement of public funds and influence peddling. Opposition figures accuse him of a conflict of interest, and reports say up to $850 million of public money reached Ueno while he was president. He had been a shareholder in the holding company that controlled the bank until March 2025, and he appointed Carlos Carvallo Spalding, a former head of Ueno, to lead the central bank. The prosecutor leading the case, Silvia Margarita González Vester, said Peña was due to be questioned on Saturday, 7 November.

Protests and a damaged investor image

Hundreds of people cheered outside Congress when the removal was announced, while residents outside Peña's house demanded that he be jailed. Protesters also gathered against the appointment of Alliana, whom they consider involved in the same scandal. Alliana promised that people affected by the collapse would be fully compensated, but Congress rejected an opposition request to impeach him as well. Elizabeth Gonzalez, a 28-year-old barista in downtown Asunción, described the mood in the capital.

“We thought we were improving, but actually we're the same as always.”

She added that the government had been promoting Paraguay to investors while this was happening. Before the collapse, Peña's government had attracted a record $1.15bn in foreign investment in 2025 and secured the country's first investment-grade credit ratings. US conservatives had embraced him, and the collapse now puts that investor pitch under strain.