South Americaupdated 14m ago2 min read
Santiago Peña Removed After Ueno Bank Collapse Triggers Paraguay Political Crisis
“What happened? Is this a story about corruption or a political power struggle between Peña and Cartes?”
“This government has a long, documented history of plunder, patronage and corruption,’ she said.”
This article is an automated aggregation of coverage from news outlets. Our editorials offer in-depth analysis curated by the NewsCord team.
Ueno Bank collapse triggered a political crisis and removal of President Santiago Peña. About 3 million Paraguayans lost account access after regulator seizure of Ueno Bank.
Save coverage image
Ueno Bank triggers crisis
Ueno Bank’s collapse in Paraguay triggered a political crisis that ended with the removal of President Santiago Peña, and the BBC said the consequences went beyond the fall of a government. Fitch Ratings withdrew the positive outlook it had on Paraguay amid the banking crisis caused by the resolution of Ueno Bank, the political storm, and the deterioration of the country’s fiscal accounts. Ueno Bank began operations in December 2023 after Paraguay’s Central Bank authorized the conversion of Financiera Ueno into a bank, and Ueno absorbed Visión Banco in 2024.
“The collapse of Ueno Bank triggered a political crisis in Paraguay that ended with the removal of President Santiago Peña.”
Ueno reached almost three million customers in a country of 6.5 million inhabitants and accumulated about US$2,800 million in deposits, including around US$855 million corresponding to public money. Paraguay’s Central Bank (BCP) reports and the Attorney General described a system in which Ueno lent large amounts of money to companies owned by the bank’s owners, with loans to companies within the same group granted without real guarantees or with insufficient guarantees.
Impeachment, detention, restitution
At least 3 million people, nearly half of Paraguay’s population, lost access to their accounts on November 3 after regulators seized the insolvent bank amid allegations of widespread fraud. Lawmakers rejected Peña’s resignation and impeached him instead, stripping him of immunity from prosecution, and Pedro Alliana was sworn in as interim president while Peña remained under house arrest. The prosecutor’s office charged Peña with presumed breach of trust, as an instigator, and administration for personal gain, as a possible author, punishable by up to 15 years in prison.
The Central Bank of Paraguay completed the return of funds to more than 1.8 million depositors backed by the first stage of restitution through the state guarantee, and almost 3 million people had been affected by the collapse. Prosecutor Verónica Valdez explained that the maximum sentence Peña could face reaches 15 years of deprivation of liberty because the investigation contemplates more than one punishable act.
Public money, limits, fallout
The shock wave from the Ueno bank collapse was felt at Mercado 4 in Asunción, where Maria Martinez told AFP she said, "People are not coming, because there is no money, it disappeared." Maria estimated her sales had plunged 90% in 10 days since the crisis began, and the crisis led to the under supervision of the young digital bank Ueno for insolvency, with depositors' funds temporarily frozen. The Central Bank agreed on November 2 to initiate the resolution procedure for Ueno Bank, and the decision was taken after it was detected that the bank did not meet the minimum solvency levels required by law.
The Central Bank launched the deposit guarantee mechanism protecting deposits up to a maximum of 75 minimum wages per person and per bank, about 30,000 dollars, and it said the limit would cover the deposits of around 97% of the bank’s customers. The investigations examined loans granted to companies of the Vázquez Group and investigators suspected part of those credits were granted to companies related to the group itself.