Paraguayan President Santiago Peña Resigns After Ueno Bank Seizure
The lower house impeached the president by a vote of 78-0 minutes after his announcement, following a collapse that froze savings for millions of depositors.
By Ricardo Brooks ·
Paraguay's President Santiago Peña resigned on Thursday, stepping down to stabilize the country after the collapse of Ueno Bank froze the savings of millions of citizens. The digital lender's failure triggered widespread protests and cost Peña the support of his own political party, the Colorado Party. The move follows a week of financial turmoil that has left retirees, workers, and depositors unable to access their money.
The lower house of Congress voted 78-0 to impeach Peña minutes after his resignation announcement. Congressional leaders are expected to accept his resignation later Thursday, which will allow Vice President Pedro Alliana to be sworn in without a Senate trial. Opposition senators argued that a trial would preserve Peña's eligibility for a lifetime Senate seat and his legal immunity from prosecution.
Peña, a former International Monetary Fund economist, posted a video on X stating he was leaving to ensure social peace and preserve democratic institutions. He expressed contrition to the public but did not accept full responsibility for the crisis. His mentor, former President Horacio Cartes, backed the impeachment, saying the party would not side with the plundering of public funds.
Ueno Bank grew from an obscure finance company to a household name in less than five years. The lender claimed more than 60% of Paraguay's adults as customers by offering generous cash-back deals and sponsoring the national soccer team. As of last month, the bank held roughly $800 million in public deposits, including funds from state pension and health systems. Regulators found that Ueno had extended large loans to companies tied to its owners without adequate collateral.
The central bank seized Ueno Bank on Tuesday after inspectors found its capital fell below the legal minimum. The bank's app and cards stopped working, and branches locked their doors, causing panic among depositors. A new law requires a state guarantee fund to repay small accounts of up to about $1,600 within five business days. The fund insures balances up to about $36,000 per customer, which should cover 97% of clients.
The financial shock has weakened the Paraguayan guaraní, which fell nearly 4% against the U.S. dollar on Thursday. This brings the currency's losses this week to nearly 7%. A judge ordered six Ueno executives, including founder Miguel Vázquez, to be jailed pending trial. Prosecutors charged 27 officials with breach of trust and attempted fraud, alleging they diverted money to related businesses.
The Labor Ministry estimates the collapse has affected about 7,000 direct and indirect jobs. Protesters in Asunción burned their Ueno credit cards and demanded unpaid wages and severance. They vowed to continue demonstrating until the impeachment process is complete, arguing that Peña's resignation alone does not return their money.
