Paraguay’s Bank Collapse Brought Down President Peña in Days
Paraguay’s president, Santiago Peña, resigned on November 5, 2026, three days after the central bank took over the Ueno bank. The Senate removed him, he was put under house arrest and charged with corruption, and his vice president took over.
Paraguay’s bank collapse brought down President Santiago Peña, who resigned on November 5, 2026, three days after the central bank placed the lender Ueno into resolution. The Senate then voted unanimously to remove him, and he was put under house arrest and charged with corruption.
Vice President Pedro Alliana was sworn in as his successor and will serve until 2028.
The crisis began when millions of Paraguayans trying to use the Ueno banking app on November 3 found they could not reach their money. Resolution is a process similar to bankruptcy, run directly by the central bank. Ueno halted transactions. The lender says it has nearly 3 million customers, about half of the country’s population.
Peña, an economist elected in 2023, had close ties to the bank. The Senate vote stripped him of his parliamentary immunity. He faces several corruption-related charges.
Warning signs before the collapse
The central bank acted after accounting adjustments left Ueno’s solvency ratio below half the legal minimum. Problems had surfaced earlier. A June 2026 report from bank supervisors described roughly US$146 million in loans to three companies linked to Grupo Vázquez, Ueno’s controlling shareholder.
Some of those companies had been transferred to group employees. Supervisors questioned the collateral and what the money was ultimately used for.
Ueno was founded as a digital lender in 2021 and drew customers with mobile banking and cash-back offers. It brought services to people poorly served by conventional banks, including rural customers. It also extended credit cards to low-income customers.
Protests and a damaged image
Protests followed, including outside Congress. Citizens accused Peña and the ruling Colorado Party of “stealing” their savings. Teachers in Paraguay have also gone on strike, demanding protection for pension funds after the collapse.
Paraguay had presented itself abroad as a model of stability. Promoters called it a “Dubai of South America,” citing low taxes and business-friendly policies. Under Peña, it was also one of Latin America’s most enthusiastic allies of the Trump administration.
Scholars of Paraguayan politics and economics said the collapse raises troubling questions about who benefits from financial modernization, who controls it and who bears the risks when it fails.
