Paraguay, the Ueno bank failure shakes President Peña
· BehindLines newsroom
Paraguay is going through a financial and political crisis after the digital bank Ueno was placed in resolution. On Thursday, November 5, President Santiago Peña tried to resign. According to Al Jazeera, citing Reuters, Congress refused the resignation, the lower house voted 78 to 0 to impeach him and the Senate opened proceedings, summoning him for Friday. Both sources cited carry Reuters reports and are therefore not independent of each other.
The bank
According to Al Jazeera, Ueno had fallen below the legal solvency ratio; once its accounts were corrected, its capital was less than half the required minimum. Ueno claims about 3 million customers in a country of 6.5 million people and administers close to $850 million in public funds, according to both sources. Customers, including pensioners who receive their benefits through the bank, gathered outside closed branches on Tuesday, November 3, The Star reports. The central bank decided to transfer the remaining funds to other institutions.
Its president, Carlos Carvallo, resigned at Peña's request; he had run Ueno until August 2023, The Star specifies, and said he would stay in post during the resolution process.
The ties to power
Peña was a business partner of the Vázquez group, Ueno's owner, until March 2025, according to The Star; per Al Jazeera, he held a stake there that he says he sold in 2025. Lawmakers accuse him of a conflict of interest and question whether there was a cover-up. The attorney general ordered three criminal investigations, according to Al Jazeera, and prosecutors ordered the arrest of eight people linked to the bank, per The Star. Former president Horacio Cartes, a leader of the Colorado Party, said the party backs impeachment and will not stand with the theft of public, private and pension money.
Measures and what comes next
Peña agreed with congressional leaders to fast-track a bill letting the Guarantee Fund compensate depositors and secure the return of public money. The Superintendency of Banks will appoint auditors. The central bank considers the case isolated; Peña says it concerns a single entity, not the national financial system. The affair is weighing on Ueno's bonds due in 2031 and on the country's sovereign debt, The Star notes.
If Peña were removed, Vice President Pedro Alliana would probably succeed him. A former president normally becomes a senator for life with some immunity, which does not apply if he is convicted in an impeachment trial, Al Jazeera recalls.