Paraguay President Santiago Peña Resigns Amid Ueno Bank Collapse as Impeachment Trial Opens

President Santiago Peña of Paraguay — Image via Wikimedia Commons (public domain)

Paraguayan President Santiago Peña has announced his resignation amid a deepening political and financial crisis triggered by the collapse of digital lender Ueno Bank, which left millions of customers unable to access their money.

Peña announced his decision on Thursday, November 5, in a video posted on social media, saying he was stepping down to preserve the country's stability, social peace and democratic institutions.

How the crisis unfolded

• Paraguay's central bank intervened in Ueno Bank earlier in the week after finding that its solvency ratio had fallen to 5.56% — less than half of the 12% regulatory minimum.
• The intervention froze the accounts of around 3 million customers in a country of about 6.5 million people, leaving depositors, pensioners and workers unable to reach their savings.
• Authorities detained eight Ueno Bank executives on November 3, including the president of the bank's controlling group, Grupo Vázquez.
• Paraguay's currency, the guarani, weakened past 6,500 per US dollar before closing down nearly 5% on the day, while sovereign bond prices also fell.

Impeachment and criminal investigation

Peña's resignation came as lawmakers moved to impeach him over alleged conflicts of interest, misuse of pension funds and institutional cover-ups linked to the bank's collapse. The Chamber of Deputies voted unanimously, 78–0, to approve impeachment charges and send them to the Senate.

However, a joint session of Congress called to accept the resignation ended without a quorum, and the Senate instead opened an impeachment trial on Thursday night. Peña said he would appear before the trial and defend himself, telling supporters: "I will do so with arguments and evidence, with respect for the Constitution and the institutions of the Republic."

Paraguay's Attorney General has also opened three criminal cases against Peña and other former officials related to the bank crisis, according to CNN.

Background

Peña faced mounting scrutiny over his former business ties to Grupo Vázquez, the conglomerate that controls Ueno Bank. He remained a business partner of the group until March 2025, according to the Associated Press. The bank had grown from a niche fintech into a mid-sized lender administering close to $850 million in public funds.

Peña, elected in April 2023, was serving a five-year term due to end in 2028. Under Paraguay's Constitution, Vice President Pedro Alliana would succeed him for the remainder of the term if Congress accepts his resignation.

The crisis has plunged one of South America's most stable economies into political uncertainty, and the financial turmoil has rattled investor confidence across the region.