Paraguayan President Santiago Peña resigned Thursday as the collapse of Ueno Bank triggered a political crisis, with the lower house voting 78-0 minutes later to impeach him. Vice President Pedro Alliana is expected to be sworn in after Congress accepts the resignation, while the impeachment charges head to the Senate.
Peña announced his decision in a video posted to X as lawmakers debated his removal, saying he was stepping down in the interest of "the stability of our country, social peace and the need to preserve our democratic institutions." He apologized to the public but stopped short of accepting responsibility for the banking crisis that has frozen millions out of their savings.
The crisis erupted after Paraguay's central bank seized Ueno Bank on Tuesday, finding its solvency ratio had fallen below half the legal minimum after accounting adjustments. The digital lender claimed nearly three million customers, more than 60 percent of Paraguay's adults, and held roughly $800 million in public deposits, including pension and health funds. Its app, cards and transfers went dark, leaving depositors queuing outside locked branches. On Wednesday, a rush to open new accounts elsewhere crashed other banks' mobile apps, fueling public panic.
Peña, who held a stake in Ueno's parent company until last year, had faced mounting scrutiny over alleged conflicts of interest. He appointed Carlos Carvallo, former president of Ueno's predecessor company, to run the central bank. Lawmakers accused him of misuse of pension funds and institutional cover-ups linked to Ueno. Peña has denied wrongdoing, arguing the controversy began as a regulatory matter before escalating politically.
The unanimous 78-0 vote marked a stunning repudiation by lawmakers from Peña's own long-ruling Colorado Party, who joined the opposition in backing impeachment. Former President Horacio Cartes, Peña's erstwhile ally, endorsed the move Thursday, writing that he would not stand on the side of the theft of public, private and pensioners' funds. Ruling party deputy Alejandro Aquilera said during the debate that "we have more than three million Paraguayans who have been harmed, who feel betrayed, swindled, deceived."
The collapse triggered three days of protests in Asuncion, with demonstrators carrying signs reading "Give us back our money" and chanting "We want your head, Peña!" Authorities have detained eight senior Ueno executives, including founder Miguel Vázquez. Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud.
Congress was expected to formally accept Peña's resignation at 5 p.m. Thursday, clearing the way for Alliana to be sworn in an hour later to serve out the remainder of the term through August 2028. The impeachment charges sent to the Senate require a two-thirds majority to convict, which would strip Peña of parliamentary immunity and leave him open to criminal prosecution.
Analysis
Why This Matters
- The collapse of a bank serving more than 60 percent of Paraguay's adults and holding public pension funds has frozen millions out of their savings, creating a humanitarian and economic emergency.
- The unanimous impeachment of a sitting president by lawmakers from his own party signals a political crisis that threatens one of South America's fastest-growing economies.
- The crisis raises questions about regulatory oversight and the mixing of political power with financial supervision in a country international investors had viewed as a stable destination.
Background
Paraguay's Colorado Party has held power for most of the past seven decades. Santiago Peña, a former finance minister and International Monetary Fund official, was elected in 2023 on a pro-business platform. Ueno Bank grew from an obscure finance company to a dominant lender after receiving its banking license under Peña's administration in late 2023, expanding through aggressive marketing, cash-back offers and sponsorship of the national football team and main stadium. The bank's rapid growth was fueled by state deposits, including money from the social security institute that manages pension and healthcare funds for most workers.
Key Perspectives
Santiago Peña: Said he resigned to preserve stability, social peace and democratic institutions, apologizing if he failed the public but denying wrongdoing and arguing the controversy began as a regulatory matter.
Protesters: Accused Peña and the Colorado Party of stealing savings, with one protester telling the Associated Press "We are fed up with 70 years of plunder."
Opposition Senator Rafael Filizzola: Called the crisis "the biggest fraud carried out from political power in the democratic era," alleging the bank was created to use public money for private businesses linked to political power.
Former President Horacio Cartes: Endorsed impeachment, writing the party "will not stand on the side of the theft of public, private and pensioners' funds."
Ruling party deputy Alejandro Aquilera: Said during the impeachment debate that "we have more than three million Paraguayans who have been harmed, who feel betrayed, swindled, deceived."
What to Watch
- The Senate vote on impeachment, which requires a two-thirds majority to convict, potentially stripping Peña of parliamentary immunity and leaving him open to criminal prosecution.
- The central bank's deposit reimbursement process, with initial payments targeting accounts up to 10 million guaraníes but the full return of roughly $800 million in public deposits uncertain.
- Vice President Pedro Alliana's ability to stabilize the country amid ongoing protests and an economic shock, with importers already reporting a 35 percent slump in retail sales.
Checked
12 claims in this story checked against 5 sources: 12 supported.
Show each claim
- SupportedPeña said he was stepping down in the interest of “the stability of our country, social peace and the need to preserve our democratic institutions.”OPB: “saying he was stepping down in the interest of “the stability of our country, social peace and the need to preserve our democratic institutions.””
- SupportedAquilera said, “we have more than three million Paraguayans who have been harmed, who feel betrayed, swindled, deceived.”Euronews: ““We have more than three million Paraguayans who have been harmed, who feel betrayed, swindled, deceived,” she said.”
- SupportedPeña resigned on Thursday.OPB: “Paraguay’s lower house voted unanimously Thursday to impeach President Santiago Peña just minutes after he announced his resignation”
- SupportedThe lower house voted 78-0 to impeach Peña minutes after he announced his resignation.OPB: “Paraguay’s lower house voted unanimously Thursday to impeach President Santiago Peña just minutes after he announced his resignation”
- SupportedVice President Alliana was expected to take over after Congress accepted Peña’s resignation.OPB: “Congress was expected to formally accept Peña’s resignation at 5 p.m., clearing the way for Vice President Pedro Alliana to be sworn in as president an hour later.”
- SupportedThe Ueno Bank collapse left millions of people unable to access their accounts.Decrypt: “the collapse of digital lender Ueno Bank left roughly three million customers unable to access their accounts”
- SupportedThe bank collapse triggered a political crisis.BBC News: “announced his resignation following a political crisis sparked by the collapse of a bank linked to him.”
- SupportedPeña apologized to the public but stopped short of accepting responsibility for the banking crisis.OPB: “The president ... expressed contrition but stopped short of accepting responsibility for the banking crisis”
- SupportedUeno claimed around 2.9 million customers, more than 60% of Paraguay’s adults.Decrypt: “Ueno claimed around 2.9 million customers, more than 60% of Paraguay’s adults.”
- SupportedUeno held roughly $800 million in public deposits, including pension and health funds.OPB: “As of last month, Ueno reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the state pension and health fund”
- SupportedProsecutors charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud.OPB: “Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud.”
- SupportedThe impeachment charges require a two-thirds Senate majority to convict; conviction would strip Peña of parliamentary immunity and leave him open to criminal proceedings.World news | The Guardian: “If approved, even after his resignation, he would lose his senate seat and, with it, parliamentary immunity, leaving him to face any criminal proceedings in the ordinary courts.”
