Paraguay removes President Santiago Peña after the collapse of Ueno Bank

Abstract

Paraguay's Senate voted on 6 November 2026 to remove President Santiago Peña for ‘mal desempeño de funciones’ in a political trial over the collapse of the digital lender Ueno Bank^[1]. All 44 senators present voted for removal, and Vice President Pedro Alliana took the oath the same evening^[1,2,3]. Ueno's closure locked roughly three million customers, about 60% of Paraguay's adults, out of their accounts^[4,5]. The central bank resolved the bank on 2 November after adjustments showed its solvency index below 50% of the required minimum^[6,7]. The Deposit Guarantee Fund covers up to 228.3 million guaraníes per depositor and institution, which covers about 97% of customers in full^[6,7,8,9]. Prosecutors ordered house arrest for Peña on preliminary charges of breach of trust, influence peddling and self-dealing administration, and he denies wrongdoing^[9,10]. Peña is the second Paraguayan president removed by impeachment since Alfredo Stroessner's dictatorship ended in 1989^[8,9]. Alliana has promised to compensate the defrauded savers^[3]. Markets registered the shock, as the sovereign bond spread rose from about 119 basis points to between 143 and 146 at the close on 5 November^[11]. Uncertainty remains: the criminal charges are preliminary, the US$1.2 billion loss claim comes from the accusing lawmakers, and the cost of the rescue has not been disclosed^[1,10,12].

Key points

• All 44 senators present voted on 6 November 2026 to remove Peña, where conviction required 30 of the chamber's 45 votes^[1,13].
• Ueno's closure locked roughly three million customers, about 60% of Paraguay's adults, out of their accounts^[4,5].
• The Deposit Guarantee Fund covers up to 228.3 million guaraníes per depositor and institution, which covers about 97% of customers in full^[6,7,8,9].
• Estimates of state money held at Ueno range from US$355 million to US$850 million^[14].
• The sovereign bond spread rose from about 119 basis points before the crisis to between 143 and 146 at the close on 5 November^[11].
• Prosecutors have charged 27 people, including the founder Miguel Vázquez, in connection with the bank's failure^[8].

References

1. El Tiempo. Senado de Paraguay destituye a Santiago Peña como presidente en un juicio político tras el escándalo financiero de Ueno Bank. El Tiempo; 6 Nov 2026. News report✓ Link checkedArchived copySupports the 44-vote verdict for mal desempeño, the defence lawyers and their argument, Peña's age, the accusers' US$1.2 billion claim and wording, the loss of the life Senate seat, the Lugo precedent and the 6.1 million population figure. ↩
2. ABC Color. Cronología del juicio político: destitución de Santiago Peña y asunción de Alliana. ABC Color; 6 Nov 2026. News report✓ Link checkedArchived copySupports the times of the vote, the oath and the home detention, the 39-2 rejection of the extension and Deputy Benítez's IPS chart. ↩
3. La Política Online. Alliana asume la presidencia del Paraguay y promete resarcir a los ahorristas estafados por Ueno Bank. La Política Online; Nov 2026. News report✓ Link checkedArchived copySupports who attended Alliana's oath, his pledge to compensate savers and the quotes from his speech. ↩
4. Associated Press. Paraguay seizes major digital bank tied to president, leaving millions of customers in limbo. The Atlanta Journal-Constitution (AP); 3 Nov 2026. News report✓ Link checkedArchived copySupports the 60% of adults figure, the 5.56% ratio, the US$380 million IPS figure, the US$38,000 conversion, the 15-day payout and Peña's quote on accountability. ↩
5. Latin Times. Ueno Bank's collapse strands 3 million customers and puts $380 million in Paraguay's public pension funds at risk. Latin Times; Nov 2026. News report✓ Link checkedArchived copySupports the share of adults affected, the IPS description and 32,000 retirees, Carvallo's earlier role and the March 2025 cancellation of Peña's stake. ↩
6. Última Hora. BCP dispone resolución de ueno bank por insuficiencia severa. Última Hora; Nov 2026. News report✓ Link checkedSupports the 2 November resolution date, Law 2334/03, the solvency trigger and the guarantee ceiling. ↩
7. Banco Central del Paraguay; ABC Color. Información oficial: todos los comunicados del BCP sobre Ueno Bank. ABC Color; 4 Nov 2026. Official statement✓ Link checkedSupports the central bank's communiqués on the resolution, the guarantee ceiling, the advances, eligibility for the first payments, app disruptions and staff liabilities. ↩
8. France 24. Paraguay places ousted president Peña under house arrest after bank collapse. France 24; 7 Nov 2026. News reportSite blocks checksSupports the charges and 10-year maximum, Alliana's quote and term, the 97% coverage, first accounts, the Stroessner context, Carvallo's arrest order and the 27 people charged. ↩
9. CBS News. Paraguay's president under house arrested after bank collapse. CBS News; Nov 2026. News report✓ Link checkedArchived copySupports the house arrest terms, Peña's denial, the 10-year maximum, the 97% coverage, the economic effects and CBS's 4 November date for the seizure. ↩
10. Infobae. Santiago Peña fue detenido tras ser destituido por el escándalo del Ueno Bank. Infobae; 6 Nov 2026. News report✓ Link checkedArchived copySupports the prosecutors' names, the preliminary charges, the 11:00 hearing, Peña's quote, the shareholding records and Carvallo's unconfirmed detention. ↩
11. The Rio Times. Paraguay Bond Risk Climbs After Bank Failure. The Rio Times; Nov 2026. News report✓ Link checkedSupports the bond spread figures, the 8.23% exchange-rate move, Lula's message and Bessent's meeting with Peña. ↩
12. The Rio Times. Paraguay Ueno Bank protests and impeachment push. The Rio Times; Nov 2026. News report✓ Link checkedSupports the 3 November protests, the opposition push against both Peña and Alliana, and the uncertainty over bondholders and rescue costs. ↩
13. Infobae. Crisis en Paraguay: de la renuncia fallida de Santiago Peña por el escándalo del Ueno Bank al comienzo del juicio político en el Senado. Infobae; 6 Nov 2026. News report✓ Link checkedArchived copySupports the 30-of-45 threshold, the content of the accusation, Rocío Vallejo's role and the lack of a quorum for the resignation. ↩
14. The Rio Times. Ueno Bank Paraguay: Solvency, Resolution and Regulator Actions. The Rio Times; Nov 2026. News report✓ Link checkedSupports the 8.9% deposit share, the unconfirmed solvency and linked-loan figures, and the range of estimates for state deposits. ↩

A unanimous removal and a same-day transfer of power

Paraguay's Senate voted on Friday 6 November 2026 to remove President Santiago Peña, declaring him guilty of ‘mal desempeño de funciones’, or poor performance of his duties, in a political trial over the collapse of the digital lender Ueno Bank^[1]. All 44 senators present voted for removal, and the result was recorded at 18:55 local time^[1,2]. Conviction required a two-thirds majority, meaning 30 of the chamber's 45 votes^[3]. Article 225 of the Constitution allows a president to be tried in this way for malfeasance in office, for crimes committed in office or for common crimes^[4].

Vice President Pedro Alliana took the oath at 19:45 the same evening before the Senate president, Basilio Núñez^[2,5]. The Constitution provides that the vice president replaces the president in case of impediment or absence^[4]. Alliana will serve until the current term ends in August 2028^[6,7]. He promised to ‘resarcir a los ahorristas defraudados por Ueno Bank’, that is, to compensate the savers he described as defrauded^[5]. As reported, the speech did not set out how compensation beyond the legal guarantee would be financed^[5].

Peña is the second Paraguayan president removed by impeachment since Alfredo Stroessner's 35-year dictatorship ended in 1989^[6,8].

The scale of Ueno and the public money it held

Ueno's closure locked roughly three million customers, about 60% of Paraguay's adults, out of their accounts^[9,10]. The Associated Press (AP) described how a decades-old finance company, rebranded after winning a banking licence in 2023, grew to more than 70 locations and sponsored the national football team^[11]. More than a million Paraguayans opened their first bank account there^[6,8]. Banking Superintendency data put its deposits at US$2.836 billion in September 2026, making it the sixth-largest bank^[12]. In March 2026 it sold US$350 million of bonds, the largest corporate debt issue in Paraguay^[13].

Public money made up a large share of its funding. Bloomberg Línea reported that government deposits at Ueno reached about 5 trillion guaraníes, roughly US$869 million, by late June, equal to 29% of its deposits^[13]. AP put public deposits at about US$800 million, roughly a quarter of the total, while Al Jazeera reported close to US$850 million^[11,14]. The Social Welfare Institute (IPS), the state body that provides pensions and health care, held US$355 million in Ueno savings certificates and bonds, about 9% of its portfolio, according to an agency report carried by Infobae, while AP gives a higher figure of about US$380 million^[9,10,15]. Some 32,000 retirees collected their pensions through Ueno^[10,16].

Warning signs and the central bank resolution

Signs of trouble were visible for months. According to AP, central bank inspectors found in June risky lending to insiders and loans to owner-linked companies ‘beyond what the law allows and without enough collateral’^[11]. In September 2026 the central bank opened an administrative investigation into whether Ueno had indirectly financed related companies^[13,17]. On 16 October Fitch Ratings kept Ueno's BB rating but cut its outlook to negative^[17]. By 21 October its bonds due in 2031 had fallen to 87 cents on the dollar from 99 cents at their March debut^[13]. Four days before the intervention the bank announced a US$100 million capitalisation plan, and hours before it said that its operations were normal^[12].

On 27 October five unions and retiree groups demanded that the IPS withdraw its money from Ueno^[17]. Peña replied that the central bank, as regulator, was in charge and that calm was needed^[17].

The central bank's board adopted the resolution on 2 November 2026, and it became public early on Tuesday 3 November^[18,19]. The decision was unanimous and was taken under Law 2334/03 after adjustments to Ueno's financial statements showed its solvency index below 50% of the required minimum^[18,19]. The central bank called it ‘una situación focalizada que no compromete a las demás entidades de plaza’, a contained case that did not affect other institutions^[19].

Deposit insurance and the order of repayment

The Deposit Guarantee Fund (FGD) covers up to 75 monthly minimum wages, or 228.3 million guaraníes, per depositor and per institution rather than per account^[18,19]. That ceiling covers about 97% of customers in full^[6,8]. The central bank first authorised an advance of up to 10 million guaraníes, then an advance of up to 40 minimum wages, 121.76 million guaraníes, payable within five business days^[19,20]. The first group to be paid comprised depositors with no more than 10 million guaraníes, no debts with Ueno and an active account at another institution^[19,20].

Some 262,000 customers had no other bank account; the central bank said they would be paid last for operational reasons, because new accounts must be opened for them across 15 institutions, and La Nación reported that the initial disbursement reached 722,037 covered savers^[21]. Full insured payouts are due within 15 days, according to AP^[9].

Prosecutors have charged 27 people, including the founder Miguel Vázquez^[6]. The former central bank president, Carlos Carvallo, has resigned^[10,14].

Accusation, defence and political fallout

The Chamber of Deputies approved the accusation against Peña by 78 votes to none^[14]. The charge sheet, led by the opposition deputy Rocío Vallejo, alleged a conflict of interest arising from his Ueno Holding shares, the appointment of Carvallo to the central bank and a revolving door between the bank and the state^[3]. The accusers alleged losses of about US$1.2 billion^[1]. The Colorado Party turned against him after its leader, Cartes, withdrew support^[14].

The record on the shares is partly disputed. Court records cited by Infobae show that Peña declared Ueno Holding shares worth 6.144 billion guaraníes, sold in April 2025^[22]. The Latin Times says instead that a shareholders' assembly cancelled his stake in March 2025^[10]. Peña resigned on 5 November, but Colorado deputies left the chamber and denied the quorum needed to accept the resignation^[3,14]. His lawyers argued that the trial was void because he had already resigned, and asked for 72 hours to prepare; the Senate refused by 39 votes to 3, with 2 abstentions^[2]. He has said he will submit to the criminal process and he denies wrongdoing^[8,22].

Financial markets registered the shock. JPMorgan's measure of Paraguay's sovereign bond spread rose from about 119 basis points before the crisis to between 143 and 146 at the close on 5 November^[23]. Depositors and retirees protested on Tuesday 3 November, demanding their money back^[24]. The first foreign reactions urged calm and offered to work with the successor^[25,26].

The political verdict does not establish criminal guilt, which prosecutors must now prove before a court^[4,22]. The criminal charges are preliminary classifications and may be revised^[22]. The central bank has published only that Ueno's solvency fell below half the minimum, and the 5.56% figure reported by AP is unconfirmed^[27]. Estimates of state money at Ueno range from US$355 million to US$850 million^[27]. The total cost of the rescue has not been disclosed^[24].

References

1. El Tiempo. Senado de Paraguay destituye a Santiago Peña como presidente en un juicio político tras el escándalo financiero de Ueno Bank. El Tiempo; 6 Nov 2026. News report✓ Link checkedArchived copySupports the 44-vote verdict for mal desempeño, the defence lawyers and their argument, Peña's age, the accusers' US$1.2 billion claim and wording, the loss of the life Senate seat, the Lugo precedent and the 6.1 million population figure. ↩
2. ABC Color. Cronología del juicio político: destitución de Santiago Peña y asunción de Alliana. ABC Color; 6 Nov 2026. News report✓ Link checkedArchived copySupports the times of the vote, the oath and the home detention, the 39-2 rejection of the extension and Deputy Benítez's IPS chart. ↩
3. Infobae. Crisis en Paraguay: de la renuncia fallida de Santiago Peña por el escándalo del Ueno Bank al comienzo del juicio político en el Senado. Infobae; 6 Nov 2026. News report✓ Link checkedArchived copySupports the 30-of-45 threshold, the content of the accusation, Rocío Vallejo's role and the lack of a quorum for the resignation. ↩
4. Constitute Project. Paraguay's Constitution of 1992 with Amendments through 2011. Constitute Project. Court or legal document✓ Link checkedArchived copySupports the text of Articles 225, 189 and 234 on political trial, life senators and succession. ↩
5. La Política Online. Alliana asume la presidencia del Paraguay y promete resarcir a los ahorristas estafados por Ueno Bank. La Política Online; Nov 2026. News report✓ Link checkedArchived copySupports who attended Alliana's oath, his pledge to compensate savers and the quotes from his speech. ↩
6. France 24. Paraguay places ousted president Peña under house arrest after bank collapse. France 24; 7 Nov 2026. News reportSite blocks checksSupports the charges and 10-year maximum, Alliana's quote and term, the 97% coverage, first accounts, the Stroessner context, Carvallo's arrest order and the 27 people charged. ↩
7. Euronews. Pedro Alliana sworn in as Paraguay president after Santiago Peña's impeachment. Euronews; 7 Nov 2026. News report✓ Link checkedArchived copySupports Alliana's term to August 2028, his biography, his relations with Cartes and the rejection of proceedings against him. ↩
8. CBS News. Paraguay's president under house arrested after bank collapse. CBS News; Nov 2026. News report✓ Link checkedArchived copySupports the house arrest terms, Peña's denial, the 10-year maximum, the 97% coverage, the economic effects and CBS's 4 November date for the seizure. ↩
9. Associated Press. Paraguay seizes major digital bank tied to president, leaving millions of customers in limbo. The Atlanta Journal-Constitution (AP); 3 Nov 2026. News report✓ Link checkedArchived copySupports the 60% of adults figure, the 5.56% ratio, the US$380 million IPS figure, the US$38,000 conversion, the 15-day payout and Peña's quote on accountability. ↩
10. Latin Times. Ueno Bank's collapse strands 3 million customers and puts $380 million in Paraguay's public pension funds at risk. Latin Times; Nov 2026. News report✓ Link checkedArchived copySupports the share of adults affected, the IPS description and 32,000 retirees, Carvallo's earlier role and the March 2025 cancellation of Peña's stake. ↩
11. Associated Press. How one bank's collapse is upending Paraguay, trapping savings and threatening its president. ABC News (AP); Nov 2026. News report✓ Link checkedArchived copySupports Ueno's growth, public deposits, inspectors' findings, the US$39 million transfers, Peña's earlier defence of Ueno, the account rush, the protests and Cartes's withdrawal of support. ↩
12. Forbes Argentina. Crisis bancaria en Paraguay: intervienen un banco con más de US$ 2.800 millones en depósitos. Forbes Argentina; Nov 2026. News report✓ Link checkedSupports the US$2.836 billion in deposits, the sixth-largest ranking and the capital plan announced before the intervention. ↩
13. Bloomberg Línea. Banco paraguayo Ueno busca reforzar su capital en medio de caída de bonos y escrutinio regulatorio. Bloomberg Línea; 21 Oct 2026. News report✓ Link checkedSupports the US$350 million bond issue, the government deposits in June, the June limit breach, the September investigation, the bond price fall and Gómez Abente's quote. ↩
14. Al Jazeera. Paraguay Congress rejects President Pena's resignation after bank collapse. Al Jazeera; 5 Nov 2026. News report✓ Link checkedArchived copySupports the US$850 million figure, the 78-0 vote in the lower house, Peña's resignation quote, Cartes's statement, Carvallo's resignation and the 6.5 million population figure. ↩
15. Infobae. La sonada intervención en Paraguay de Ueno bank que ha desatado una tormenta política. Infobae; 4 Nov 2026. News report✓ Link checkedSupports the US$355 million IPS exposure, the 9% portfolio share, and the ANDE and Itaipú funds at risk. ↩
16. Buenos Aires Herald. Ueno Bank scandal threatens Paraguay's reputation and Peña's presidency. Buenos Aires Herald; Nov 2026. News report✓ Link checkedSupports the figure of about 32,000 pensioners paid through Ueno. ↩
17. The Rio Times. Paraguay Unions Demand Pension Fund Exit From Ueno Bank. The Rio Times; 28 Oct 2026. News report✓ Link checkedSupports the unions' 27 October demand, Fitch's 16 October outlook cut, the September investigation and Peña's response. ↩
18. Última Hora. BCP dispone resolución de ueno bank por insuficiencia severa. Última Hora; Nov 2026. News report✓ Link checkedSupports the 2 November resolution date, Law 2334/03, the solvency trigger and the guarantee ceiling. ↩
19. Banco Central del Paraguay; ABC Color. Información oficial: todos los comunicados del BCP sobre Ueno Bank. ABC Color; 4 Nov 2026. Official statement✓ Link checkedSupports the central bank's communiqués on the resolution, the guarantee ceiling, the advances, eligibility for the first payments, app disruptions and staff liabilities. ↩
20. La Nación. Inician pago de garantía a ahorristas de ueno bank. La Nación (Paraguay); 6 Nov 2026. News report✓ Link checkedSupports the 40-minimum-wage advance, the five-business-day timeline and the first-stage eligibility conditions. ↩
21. La Nación. ¿Por qué el BCP pagará al final a los 262.000 clientes no bancarizados de ueno?. La Nación (Paraguay); 6 Nov 2026. News report✓ Link checkedSupports the 262,000 unbanked customers, the 15 institutions and the 722,037 savers in the initial disbursement. ↩
22. Infobae. Santiago Peña fue detenido tras ser destituido por el escándalo del Ueno Bank. Infobae; 6 Nov 2026. News report✓ Link checkedArchived copySupports the prosecutors' names, the preliminary charges, the 11:00 hearing, Peña's quote, the shareholding records and Carvallo's unconfirmed detention. ↩
23. The Rio Times. Paraguay Bond Risk Climbs After Bank Failure. The Rio Times; Nov 2026. News report✓ Link checkedSupports the bond spread figures, the 8.23% exchange-rate move, Lula's message and Bessent's meeting with Peña. ↩
24. The Rio Times. Paraguay Ueno Bank protests and impeachment push. The Rio Times; Nov 2026. News report✓ Link checkedSupports the 3 November protests, the opposition push against both Peña and Alliana, and the uncertainty over bondholders and rescue costs. ↩
25. Infobae. Estados Unidos pide preservar la paz y respetar las instituciones democráticas en Paraguay. Infobae; 6 Nov 2026. News report✓ Link checkedSupports the US Embassy's statement before the vote. ↩
26. ABC Color. EE.UU. espera trabajar con Alliana y califica a Paraguay de socio estratégico y aliado. ABC Color; 7 Nov 2026. News report✓ Link checkedSupports Robert Alter's 7 November statement on working with Alliana. ↩
27. The Rio Times. Ueno Bank Paraguay: Solvency, Resolution and Regulator Actions. The Rio Times; Nov 2026. News report✓ Link checkedSupports the 8.9% deposit share, the unconfirmed solvency and linked-loan figures, and the range of estimates for state deposits. ↩

Abstract

1A unanimous Senate verdict and a same-day transfer of power

Paraguay's Senate voted on Friday 6 November 2026 to remove President Santiago Peña, declaring him guilty of ‘mal desempeño de funciones’, or poor performance of his duties, in a political trial over the collapse of the digital lender Ueno Bank^[1]. All 44 senators present voted for removal, and the result was recorded at 18:55 local time^[1,2]. Conviction required a two-thirds majority, meaning 30 of the chamber's 45 votes^[13]. Article 225 of the Constitution allows a president to be tried in this way for malfeasance in office, for crimes committed in office or for common crimes^[14]. Peña, 47, was represented by his lawyers, Adolfo Ferreiro and Ricardo Preda^[1].

Vice President Pedro Alliana took the oath at 19:45 the same evening before the Senate president, Basilio Núñez, the president of the Chamber of Deputies, Raúl Latorre, and the president of the Supreme Court, Alberto Martínez Simón^[2,3]. The Constitution provides that the vice president replaces the president in case of impediment or absence^[14]. Alliana will serve until the current term ends in August 2028^[8,15]. He said that ‘the Paraguay we receive today has urgent needs’ and promised to ‘resarcir a los ahorristas defraudados por Ueno Bank’, that is, to compensate the savers he described as defrauded^[3].

A detention order signed by prosecutors including Elena Fiore and Christian Benítez lists breach of trust, influence peddling and self-dealing administration, which the prosecutors called preliminary classifications open to revision^[10]. International outlets render the third offence as using public office for personal gain, and report that the charges can carry up to 10 years in prison^[8,9]. Police enforced the order as home detention at 20:05, and Peña was told to remain at his residence and to appear for questioning before prosecutors on Saturday 7 November^[2,9,10]. When he was told of the order he said ‘Me voy a someter al proceso’, meaning I will submit to the process^[10]. He denies wrongdoing^[9].

The scale of the failure explains why the case is followed abroad. Ueno's closure locked roughly three million customers, about 60% of Paraguay's adults, out of their accounts^[4,5]. Peña is the second Paraguayan president removed by impeachment since Alfredo Stroessner's 35-year dictatorship ended in 1989^[8,9]. The verdict also costs him the life seat in the Senate that the Constitution grants to democratically elected former presidents unless they are convicted in a political trial^[1,14]. Barely three days separated the announcement of the bank's seizure from the president's removal.

2How a family finance company became a household name

Ueno's corporate roots lie in Credicentro, a lender founded in 1984 by Víctor Hugo Vázquez^[16]. Its direct predecessor was Financiera El Comercio, which the Vázquez Group bought in 2021, and the holding company took the name ueno Holding in 2022^[16]. The central bank approved its conversion into a bank on 22 November 2023, banking operations began on 1 December 2023, and it absorbed Visión Banco on 28 June 2024^[16]. Federico Miguel Vázquez Villasanti is the principal shareholder of the Vázquez Group, which held 86.73% of U Holdings, a Luxembourg entity, and the European lender OTP Bank bought a stake in December 2025 for US$30 million^[16].

Growth was fast. By September the bank reported more than three million clients and more than 48,000 new ones each month^[16]. The Associated Press (AP) described how a decades-old finance company, rebranded after winning a banking licence in 2023, grew to more than 70 locations and sponsored the national football team^[17]. More than a million Paraguayans opened their first bank account there^[8,9]. Banking Superintendency data put its deposits at US$2.836 billion in September 2026, making it the sixth-largest bank, while the Rio Times, an English-language business outlet, calls it the fifth-largest private bank, with 8.9% of national deposits^[18,19]. In March 2026 it sold US$350 million of bonds, the largest corporate debt issue in Paraguay^[20].

Public money made up a large share of its funding. Bloomberg Línea reported that government deposits at Ueno reached about 5 trillion guaraníes, roughly US$869 million, by late June, equal to 29% of its deposits^[20]. AP put public deposits at about US$800 million, roughly a quarter of the total, including state pension and health contributions and accounts of the hydroelectric operator, while Al Jazeera reported close to US$850 million^[17,21]. An agency report carried by Infobae said that the Social Welfare Institute (IPS), the state body that provides pensions and health care, held US$355 million in Ueno savings certificates and bonds, about 9% of its portfolio, and that funds of the electricity utility ANDE and the Itaipú binational dam were also at risk^[22]. AP gives a higher IPS figure of about US$380 million^[4]. Some 32,000 retirees collected their pensions through Ueno^[5,23]. At the trial, Deputy Raúl Benítez showed a chart claiming that IPS funds at the bank had multiplied thirtyfold in 31 months^[2].

3Warning signs in the months before the seizure

Signs of trouble were visible for months. According to AP, central bank inspectors found in June risky lending to insiders and loans to owner-linked companies ‘beyond what the law allows and without enough collateral’^[17]. Bloomberg Línea reported that Ueno corrected a breach of its related-party lending limit in June^[20]. AP also reported that in September 2025 nearly US$39 million went to three insider-linked companies in a single day^[17]. In September 2026 the central bank opened an administrative investigation into whether Ueno had indirectly financed related companies, a process expected to take four months^[20,24].

Markets reacted before regulators acted. On 16 October Fitch Ratings kept Ueno's BB rating but cut its outlook to negative, citing, in the Rio Times' summary, ‘fast balance-sheet growth and many intangible assets, which limit the bank's capacity to absorb losses’^[24]. By 21 October its bonds due in 2031 had fallen to 87 cents on the dollar from 99 cents at their March debut, and the board member Alejandro Gómez Abente told Bloomberg Línea: ‘Esperamos hacer un anuncio muy importante en relación con el capital en los próximos días’^[20]. Four days before the intervention the bank announced a US$100 million capitalisation plan, and hours before it said that its operations were normal^[18].

Pressure also came from depositors' representatives. On 27 October five unions and retiree groups, including the teachers' union OTEP-SN, demanded that the IPS withdraw its money from Ueno, citing exposure figures that the Rio Times could not confirm^[24]. Peña replied that the central bank, as regulator, was in charge and that calm was needed, and noted that banks had earned more than US$700 million in the first nine months of 2026^[24]. AP reported that he had defended Ueno as recently as October despite the warnings^[17].

Official assessments of the wider system were reassuring. When the IMF Executive Board concluded its annual Article IV review on 28 August 2026, it reported system-wide capital ratios of 14% for Tier 1 and 17.3% for total regulatory capital, above minimums of 8% and 12%, and liquid assets of 24.3% of total liabilities in May 2026^[25]. The press release noted consumer credit growth of 22.8% and urged ‘close monitoring and readiness to act if signs of weaker underwriting standards emerge’^[25]. Aggregate ratios of this kind describe the average bank and say little about a single fast-growing institution whose reported capital is overstated.

4Resolution, deposit insurance and the repayment queue

The central bank's board adopted the resolution on 2 November 2026, and it became public early on Tuesday 3 November^[6,7]. The decision was unanimous and was taken under Law 2334/03 after adjustments to Ueno's financial statements showed its solvency index below 50% of the required minimum^[6,7]. The central bank called it ‘una situación focalizada que no compromete a las demás entidades de plaza’, a contained case that did not affect other institutions^[7]. AP reported a solvency ratio of 5.56% against a 12% minimum, but the Rio Times said it could not confirm that number, because the central bank's statement says only that the ratio fell below half the minimum^[4,19]. According to AP, regulators found poorly documented lending and expenses wrongly counted as assets^[17].

The Deposit Guarantee Fund (FGD) covers up to 75 monthly minimum wages, or 228.3 million guaraníes, per depositor and per institution rather than per account^[6,7]. That ceiling covers about 97% of customers in full^[8,9]. Outlets have converted it at about US$35,000 or about US$38,000^[4,8]; the gap appears to reflect the falling guaraní, since a Rio Times report using a later exchange rate gives about US$35,900^[26]. The central bank first authorised an advance of up to 10 million guaraníes, then an advance of up to 40 minimum wages, 121.76 million guaraníes, payable within five business days^[7,27]. The first group to be paid comprised depositors with no more than 10 million guaraníes, no debts with Ueno and an active account at another institution^[7,27].

Some 262,000 customers had no other bank account; the central bank said they would be paid last for operational reasons, because new accounts must be opened for them across 15 institutions, and La Nación reported that the initial disbursement reached 722,037 covered savers^[28]. AP reported that about 280,000 customers were given accounts elsewhere and that the rush crashed other banks' mobile apps, problems that the central bank attributed to unprecedented demand for new accounts^[7,17]. Full insured payouts are due within 15 days, according to AP^[4].

The former central bank president, Carlos Carvallo, who chaired Financiera Ueno from June 2021 to mid-2023 before Peña's government appointed him, has resigned^[5,21]. Prosecutors have charged 27 people, including the founder Miguel Vázquez; six former directors are in pre-trial detention and two are confined at home with electronic monitors, and luxury cars, a yacht and two small planes have been seized^[8].

5The accusation, the defence and the 2012 precedent

Peña, an economist who worked at the IMF and joined the central bank's board in 2012, was finance minister under President Horacio Cartes from 2015 to 2017, won the 2023 election with 43.9% of the vote and took office on 15 August 2023^[29]. The Chamber of Deputies approved the accusation against him by 78 votes to none^[21]. The charge sheet, led by the opposition deputy Rocío Vallejo, alleged a conflict of interest arising from his Ueno Holding shares, the appointment of Carvallo to the central bank and a revolving door between the bank and the state^[13]. The accusers alleged losses of about US$1.2 billion and called Peña the greatest embezzler in the country's history^[1].

The record on the shares is partly disputed. Court records cited by Infobae show that Peña declared Ueno Holding shares worth 6.144 billion guaraníes, which he sold in April 2025^[10]. The Latin Times says instead that a shareholders' assembly cancelled his stake in March 2025^[5]. On 4 November Núñez said that Peña had flatly denied any link when asked, telling him ‘lo que yo tengo está en mi declaración jurada’, meaning that what he owns is listed in his sworn asset declaration^[30]. The Colorado Party turned against him after its leader, Cartes, withdrew support, writing: ‘We will not side with the theft of public, private and pension funds’^[21].

On 5 November Peña said ‘Me presentaré y ejerceré mi derecho a la defensa’ and added that ‘El pago a los ahorristas no puede quedar pendiente de lo que ocurra conmigo’^[31]. The same day he resigned, citing ‘the stability of our country, social peace and the need to preserve our democratic institutions’, but Colorado deputies left the chamber and denied the quorum needed to accept the resignation^[13,21]. His lawyers argued that the trial was void because he had already resigned, and asked for 72 hours to prepare; the Senate refused by 39 votes to 3, with 2 abstentions^[2].

The precedent is Fernando Lugo^[1]. In June 2012 the Senate removed Lugo by 39 votes to 4 on five counts of malfeasance, including an alleged role in a confrontation between police and farmers that killed 17 people, and Venezuela's foreign minister, Nicolás Maduro, called it a ‘new type of coup’^[32]. The first foreign reactions in 2026 urged calm and offered to work with the successor^[33,34].

6Markets, protests and the promises of a new president

Financial markets registered the shock. JPMorgan's measure of Paraguay's sovereign bond spread rose from about 119 basis points before the crisis to between 143 and 146 at the close on 5 November, after touching 157 during the day^[11]. The Rio Times reported the exchange rate at 6,360 guaraníes per dollar on 5 November against 5,661 on 28 October, a rise of roughly 12% in the dollar's price, while a second Rio Times report gave 6,358 and a rise of 8.23%^[26]. CBS News reported that some 3,000 ride-hailing drivers lost work and that US$21 million in development loans became inaccessible^[9].

Anger also reached the streets. Depositors and retirees protested on Tuesday 3 November, demanding their money back^[12]. AP reported that riot police used pepper spray and rubber pellets against crowds, and that hundreds of Ueno employees protested over unpaid wages^[17]. The central bank's intervention team told staff that it was working to settle the bank's obligations to its workers^[7].

Foreign governments have so far concentrated on stability. During the impeachment proceedings the United States Embassy urged, ‘como amigo y aliado del Paraguay’, that the authorities and the Paraguayan people keep the peace and respect their democratic institutions^[33]. On 7 November its chargé d'affaires, Robert Alter, called Paraguay a strategic partner and said the United States expected to work with Alliana's government^[34]. On 6 November Brazil's President Lula said he wanted to host Alliana in Brasília, without mentioning Peña^[11]. The US Treasury Secretary, Scott Bessent, had met Peña on 22 October, less than two weeks before the seizure^[6,11].

Alliana, 52, is a former member of the national basketball team, a former governor of Ñeembucú department and a Colorado Party leader who sat in the Chamber of Deputies from 2013 to 2023; he once had Cartes's backing, but their relationship later deteriorated^[15]. Opposition lawmakers had also sought to impeach him, but those proceedings were rejected while the case against Peña went ahead^[12,15]. In his inaugural speech he said ‘Mi transparencia es innegociable’ and ‘En el tiempo que nos queda no hay excusas’^[3]. As reported, the speech did not set out how compensation beyond the legal guarantee would be financed^[3].

Uncertainties and open questions

Conclusion

Paraguay's institutions moved at unusual speed: a bank resolution announced on 3 November was followed by a presidential resignation on 5 November and a unanimous removal on 6 November^[1,6,21]. The verdict was political, reached under a constitutional standard of malfeasance in office, and it does not establish criminal guilt, which prosecutors must now prove before a court^[10,14]. The practical tests for Alliana's government are whether the deposit guarantee is paid on time to the roughly 97% of customers it covers, how depositors above the ceiling and the pension institute are treated, and whether markets accept the central bank's view that the failure was confined to one institution^[5,7,8,11]. The record assembled so far shows a regulator that identified insider lending months before it acted, and a president whose former shareholding and appointments made his denials hard to sustain politically. Whether any of it amounts to a crime is a question the courts have only begun to examine.

References

1. El Tiempo. Senado de Paraguay destituye a Santiago Peña como presidente en un juicio político tras el escándalo financiero de Ueno Bank. El Tiempo; 6 Nov 2026. News report✓ Link checkedArchived copySupports the 44-vote verdict for mal desempeño, the defence lawyers and their argument, Peña's age, the accusers' US$1.2 billion claim and wording, the loss of the life Senate seat, the Lugo precedent and the 6.1 million population figure. ↩
2. ABC Color. Cronología del juicio político: destitución de Santiago Peña y asunción de Alliana. ABC Color; 6 Nov 2026. News report✓ Link checkedArchived copySupports the times of the vote, the oath and the home detention, the 39-2 rejection of the extension and Deputy Benítez's IPS chart. ↩
3. La Política Online. Alliana asume la presidencia del Paraguay y promete resarcir a los ahorristas estafados por Ueno Bank. La Política Online; Nov 2026. News report✓ Link checkedArchived copySupports who attended Alliana's oath, his pledge to compensate savers and the quotes from his speech. ↩
4. Associated Press. Paraguay seizes major digital bank tied to president, leaving millions of customers in limbo. The Atlanta Journal-Constitution (AP); 3 Nov 2026. News report✓ Link checkedArchived copySupports the 60% of adults figure, the 5.56% ratio, the US$380 million IPS figure, the US$38,000 conversion, the 15-day payout and Peña's quote on accountability. ↩
5. Latin Times. Ueno Bank's collapse strands 3 million customers and puts $380 million in Paraguay's public pension funds at risk. Latin Times; Nov 2026. News report✓ Link checkedArchived copySupports the share of adults affected, the IPS description and 32,000 retirees, Carvallo's earlier role and the March 2025 cancellation of Peña's stake. ↩
6. Última Hora. BCP dispone resolución de ueno bank por insuficiencia severa. Última Hora; Nov 2026. News report✓ Link checkedSupports the 2 November resolution date, Law 2334/03, the solvency trigger and the guarantee ceiling. ↩
7. Banco Central del Paraguay; ABC Color. Información oficial: todos los comunicados del BCP sobre Ueno Bank. ABC Color; 4 Nov 2026. Official statement✓ Link checkedSupports the central bank's communiqués on the resolution, the guarantee ceiling, the advances, eligibility for the first payments, app disruptions and staff liabilities. ↩
8. France 24. Paraguay places ousted president Peña under house arrest after bank collapse. France 24; 7 Nov 2026. News reportSite blocks checksSupports the charges and 10-year maximum, Alliana's quote and term, the 97% coverage, first accounts, the Stroessner context, Carvallo's arrest order and the 27 people charged. ↩
9. CBS News. Paraguay's president under house arrested after bank collapse. CBS News; Nov 2026. News report✓ Link checkedArchived copySupports the house arrest terms, Peña's denial, the 10-year maximum, the 97% coverage, the economic effects and CBS's 4 November date for the seizure. ↩
10. Infobae. Santiago Peña fue detenido tras ser destituido por el escándalo del Ueno Bank. Infobae; 6 Nov 2026. News report✓ Link checkedArchived copySupports the prosecutors' names, the preliminary charges, the 11:00 hearing, Peña's quote, the shareholding records and Carvallo's unconfirmed detention. ↩
11. The Rio Times. Paraguay Bond Risk Climbs After Bank Failure. The Rio Times; Nov 2026. News report✓ Link checkedSupports the bond spread figures, the 8.23% exchange-rate move, Lula's message and Bessent's meeting with Peña. ↩
12. The Rio Times. Paraguay Ueno Bank protests and impeachment push. The Rio Times; Nov 2026. News report✓ Link checkedSupports the 3 November protests, the opposition push against both Peña and Alliana, and the uncertainty over bondholders and rescue costs. ↩
13. Infobae. Crisis en Paraguay: de la renuncia fallida de Santiago Peña por el escándalo del Ueno Bank al comienzo del juicio político en el Senado. Infobae; 6 Nov 2026. News report✓ Link checkedArchived copySupports the 30-of-45 threshold, the content of the accusation, Rocío Vallejo's role and the lack of a quorum for the resignation. ↩
14. Constitute Project. Paraguay's Constitution of 1992 with Amendments through 2011. Constitute Project. Court or legal document✓ Link checkedArchived copySupports the text of Articles 225, 189 and 234 on political trial, life senators and succession. ↩
15. Euronews. Pedro Alliana sworn in as Paraguay president after Santiago Peña's impeachment. Euronews; 7 Nov 2026. News report✓ Link checkedArchived copySupports Alliana's term to August 2028, his biography, his relations with Cartes and the rejection of proceedings against him. ↩
16. Forbes Argentina. De financiera a banco de tres millones de clientes: qué es Ueno, la entidad intervenida en Paraguay. Forbes Argentina; Nov 2026. News report✓ Link checkedArchived copySupports Ueno's corporate history, its licence dates, the Visión Banco merger, its ownership and its client growth. ↩
17. Associated Press. How one bank's collapse is upending Paraguay, trapping savings and threatening its president. ABC News (AP); Nov 2026. News report✓ Link checkedArchived copySupports Ueno's growth, public deposits, inspectors' findings, the US$39 million transfers, Peña's earlier defence of Ueno, the account rush, the protests and Cartes's withdrawal of support. ↩
18. Forbes Argentina. Crisis bancaria en Paraguay: intervienen un banco con más de US$ 2.800 millones en depósitos. Forbes Argentina; Nov 2026. News report✓ Link checkedSupports the US$2.836 billion in deposits, the sixth-largest ranking and the capital plan announced before the intervention. ↩
19. The Rio Times. Ueno Bank Paraguay: Solvency, Resolution and Regulator Actions. The Rio Times; Nov 2026. News report✓ Link checkedSupports the 8.9% deposit share, the unconfirmed solvency and linked-loan figures, and the range of estimates for state deposits. ↩
20. Bloomberg Línea. Banco paraguayo Ueno busca reforzar su capital en medio de caída de bonos y escrutinio regulatorio. Bloomberg Línea; 21 Oct 2026. News report✓ Link checkedSupports the US$350 million bond issue, the government deposits in June, the June limit breach, the September investigation, the bond price fall and Gómez Abente's quote. ↩
21. Al Jazeera. Paraguay Congress rejects President Pena's resignation after bank collapse. Al Jazeera; 5 Nov 2026. News report✓ Link checkedArchived copySupports the US$850 million figure, the 78-0 vote in the lower house, Peña's resignation quote, Cartes's statement, Carvallo's resignation and the 6.5 million population figure. ↩
22. Infobae. La sonada intervención en Paraguay de Ueno bank que ha desatado una tormenta política. Infobae; 4 Nov 2026. News report✓ Link checkedSupports the US$355 million IPS exposure, the 9% portfolio share, and the ANDE and Itaipú funds at risk. ↩
23. Buenos Aires Herald. Ueno Bank scandal threatens Paraguay's reputation and Peña's presidency. Buenos Aires Herald; Nov 2026. News report✓ Link checkedSupports the figure of about 32,000 pensioners paid through Ueno. ↩
24. The Rio Times. Paraguay Unions Demand Pension Fund Exit From Ueno Bank. The Rio Times; 28 Oct 2026. News report✓ Link checkedSupports the unions' 27 October demand, Fitch's 16 October outlook cut, the September investigation and Peña's response. ↩
25. International Monetary Fund. IMF Executive Board Concludes 2026 Article IV Consultation with Paraguay. International Monetary Fund; 28 Aug 2026. Official reportSite blocks checksSupports the system capital and liquidity ratios, consumer credit growth and the IMF's call for close monitoring. ↩
26. The Rio Times. Paraguay Dollar Jumps 12% as Ueno Bank Fails. The Rio Times; Nov 2026. News report✓ Link checkedSupports the exchange rates on 28 October and 5 November and the US$35,900 conversion of the ceiling. ↩
27. La Nación. Inician pago de garantía a ahorristas de ueno bank. La Nación (Paraguay); 6 Nov 2026. News report✓ Link checkedSupports the 40-minimum-wage advance, the five-business-day timeline and the first-stage eligibility conditions. ↩
28. La Nación. ¿Por qué el BCP pagará al final a los 262.000 clientes no bancarizados de ueno?. La Nación (Paraguay); 6 Nov 2026. News report✓ Link checkedSupports the 262,000 unbanked customers, the 15 institutions and the 722,037 savers in the initial disbursement. ↩
29. Wikipedia contributors. Santiago Peña. Wikipedia. Reference work✓ Link checkedArchived copySupports Peña's career, his 2023 vote share and his inauguration date. ↩
30. Diario HOY. Según Bachi, Peña niega vínculo con Ueno y pide mirar su declaración jurada. Diario HOY; 4 Nov 2026. News report✓ Link checkedSupports Núñez's account of Peña's denial and the quote about his sworn declaration. ↩
31. El Litoral. Santiago Peña anunció que se defenderá del juicio político en Paraguay y pidió que devuelvan los ahorros de Ueno Bank. El Litoral; 5 Nov 2026. News report✓ Link checkedSupports Peña's 5 November quotes on his defence and on savers. ↩
32. Al Jazeera. Paraguay senate impeaches president. Al Jazeera; 23 Jun 2012. News report✓ Link checkedArchived copySupports the 2012 Lugo vote, the charges against him and Maduro's comment. ↩
33. Infobae. Estados Unidos pide preservar la paz y respetar las instituciones democráticas en Paraguay. Infobae; 6 Nov 2026. News report✓ Link checkedSupports the US Embassy's statement before the vote. ↩
34. ABC Color. EE.UU. espera trabajar con Alliana y califica a Paraguay de socio estratégico y aliado. ABC Color; 7 Nov 2026. News report✓ Link checkedSupports Robert Alter's 7 November statement on working with Alliana. ↩