Paraguayan President Santiago Peña announced his resignation on Thursday, November 6, 2026, following the collapse of Ueno Bank, a major digital lender. The move triggered an immediate political backlash, as the lower house of Congress voted 78-0 to impeach him minutes after his announcement, sending the charges to the Senate for trial.
Impeachment proceedings bypass presidential resignation
While Peña submitted his resignation via video, stating he acted to preserve the stability of our country, social peace and the need to preserve our democratic institutions,
lawmakers moved to ensure he would not escape legal consequences.
The Chamber of Deputies unanimously approved the motion, which now moves to the Senate, where a two-thirds majority is required for removal. The presidential office insisted that Peña would appear for the trial. As the political crisis continues, Senator Yolanda Paredes told reporters that Peña needs to be jailed, calling for an arrest warrant and pretrial detention.
[Paraguay’s president quits after millions of people’s savings frozen in bank crisis] “Santiago Peña’s rightwing administration had authorised Ueno Bank to drastically expand operations before collapse“https://t.co/yuycS6Kl3g
The political fallout has also affected the Colorado Party, the right-wing party that holds a majority in both houses of Congress. Vice President Pedro Alliana, who had been seeking the party’s nomination for the 2028 election, announced on Monday that he was putting his presidential bid on hold, stating, If we don’t get our house in order, there’s no presidential project.
Ueno Bank insolvency freezes millions of accounts
The political crisis follows the Central Bank of Paraguay’s decision to place Ueno Bank into resolution after its solvency ratio fell below half the legal minimum.
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The lender managed significant volumes of public money, including between $800 million and $855 million in deposits from state and pension entities. The bank’s president had previously stated that public money accounted for about one-quarter of the bank’s deposits.
| Category | Details |
|---|---|
| Total Customers | Approximately 3 million (claiming 60% of adults) |
| Public Fund Management | $800 million to $855 million |
| Individual Deposit Guarantee | Up to ₲228.3 million (roughly $36,000–$38,000) |
To address the immediate crisis, Paraguay’s Deposit Guarantee Fund—the equivalent of the FDIC in the United States—has begun processing payments in stages. The Central Bank announced that initial payments would prioritize small savers and those with accounts at other financial institutions. While 97% of Ueno depositors are estimated to have balances covered by the guarantee, the fund aims to complete full payments within a 15-day window, which can be extended once to a total of 30 days.
Allegations of risky lending and conflicts of interest
Regulators identified a pattern of risky lending to insiders during their inspection of Ueno Bank. In June, inspectors from the central bank found a pattern of risky lending to insiders. Specifically, the bank’s supervisor documented that Ueno disbursed loans and credit facilities to related parties.
The scandal has centered on Peña’s previous ties to the bank’s holding company, Grupo Vázquez. While Peña stated he had disposed of his shares in 2025, lawmakers have accused him of negligence and complicity in covering up the bank’s insolvency. The bank has maintained that Peña was never a shareholder or investor.
Regulators are now scrutinizing the Central Bank of Paraguay. President Peña had appointed Carlos Carvallo to lead the agency. While the central bank stated that Carvallo recused himself from decisions involving Ueno, critics have questioned the integrity of his transition from the bank’s predecessor to the regulatory head. Carvallo resigned from the central bank on Tuesday, November 3, following the bank’s collapse.
Pedro Alliana prepares for office amid criminal investigations
As the impeachment moves to the Senate, Vice President Pedro Alliana is positioned to take office. The central bank has stated that Ueno’s failure is an isolated case and does not pose a systemic risk to the rest of the Paraguayan financial system.
Law enforcement action has commenced against bank leadership. The Attorney General has also opened three separate criminal cases against Peña and other former officials related to the crisis.
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More on Ueno Bank
Paraguayan President Santiago Pena announced his resignation amid a growing political and financial crisis linked to the Ueno Bank scandal. 🇵🇾🏛️ In a national address, Pena stated he stepped down to preserve political stability, social peace, and democratic institutions. Facing… pic.twitter.com/3Isyt8IkOv