Paraguayan President Santiago Peña was impeached and placed under house arrest on November 6, 2026, after the sudden collapse of Ueno Bank froze the savings of nearly three million people and triggered sweeping political upheaval across the nation.
Senate Impeachment and House Arrest
The Paraguayan Senate voted 44 to zero on Friday to remove Santiago Peña from office for misconduct, capping a dizzying political crisis. Prosecutors promptly placed the ousted president under house arrest at his home in Asunción on suspicion of breach of trust and influence peddling.
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Peña had attempted to step down on Thursday, announcing his resignation in a video posted on social media. I have made the decision to submit my resignation from the Presidency of the Republic. I do so with the stability of our country, social peace, and the need to preserve our public institutions in mind,
he said, according to CNN.
Rather than accept his resignation, the lower house of Congress voted 78 to zero on Thursday to impeach him, and the Senate followed suit the next day. Lawmakers rejected the resignation specifically because accepting it would have allowed Peña to retain his right as a former president to become a senator for life, which carries parliamentary immunity from prosecution, as reported by Al Jazeera. Vice President Pedro Alliana was sworn in as the country’s 53rd president shortly after the impeachment vote and will serve out the remainder of the term until August 2028, according to Dw and India Today.
When things happen in Latin America, sometimes they happen very fast. Santiago Peña, Paraguay's president until yesterday, is now under arrest:https://t.co/GGRFKkcOTN
The Collapse of Ueno Bank and Frozen Accounts
The crisis erupted on November 3, 2026, when the Central Bank of Paraguay (BCP) seized Ueno Bank after determining that the digital lender had breached minimum solvency requirements, leaving it without sufficient capital to cover its risks. The bank, which grew rapidly in less than five years from a decades-old finance company into a household name, claimed roughly 60% of Paraguay’s adult population—about 2.9 million customers—as account holders, according to NPR and The Guardian.
Overnight, millions of customers lost access to their accounts, pensions, and basic digital transactions, sparking nationwide protests and street demonstrations in Asunción.
I have to remind myself that other countries do sometimes hold their presidents accountable for crimes and corruption. Something to aspire to. https://t.co/kfCMYb8RMc pic.twitter.com/O6M8dP1CI4
To mitigate the panic, Congress rushed through a law on Wednesday establishing a state guarantee fund to repay depositors. Payouts began Thursday for small accounts holding up to about $1,600 for customers with no debts to Ueno, with the central bank noting that deposits are insured up to approximately $35,000, as detailed by MS NOW.
Investigators Examine State Pension Funds Deposited in Lender
Investigators are examining whether Ueno was shielded from accountability due to its government connections and whether regulatory oversight was compromised, as reported by CBC. Peña’s administration had directed millions in public funds to Ueno, including deposits from the Social Security Institute (IPS), which manages the pensions of most Paraguayan workers, according to CNN. An estimated $355 million in state pension funds were invested in the lender, as noted by The Guardian.
Scrutiny focused on Carlos Carvallo Spalding, whom Peña appointed to head the central bank in 2023 after Carvallo previously served as CEO of Financiera Ueno, the bank's predecessor, according to The Guardian and Al Jazeera. Prosecutors have also ordered the arrest of Carvallo, alongside arrest warrants and charges against 27 individuals including bank founder Miguel Vázquez and president Juan Manuel Gustale, for offenses including breach of trust and attempted fraud, according to CBC and MS NOW.
The political backlash proved fatal to Peña’s presidency when former president and ruling Colorado Party leader Horacio Cartes turned against him, stating that the party would not side with the plundering of public and private funds and pensioners’ money,
as reported by CBC. Senator Rafael Filizzola described the situation during the impeachment session as one of the biggest corruption scandals since the return of democracy,
according to The Guardian.
[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
Earlier coverage: Paraguayan President Santiago Peña Resigns After Ueno Bank Collapse
More on Santiago Peña
Ousted Paraguayan President Santiago Peña is under house arrest on suspicion of breach of trust. He was detained shortly after the Senate removed him from office following a bank collapse. https://t.co/EXWR8dAi2V