Paraguay President Santiago Peña resigns amid bank collapse crisis

Paraguayan President Santiago Peña resigned on Thursday, 5 November 2026, amid a profound political and financial crisis sparked by the sudden collapse of a major digital lender, Ueno Bank. The downfall of the institution, which served millions of customers and managed hundreds of millions in public funds, triggered violent street protests, criminal investigations, and a rapid bipartisan move toward impeachment that dismantled the president's political support in a matter of days.

The shockwaves hit Paraguay in the early hours of Tuesday, 3 November 2026, when Ueno Bank's mobile application stopped displaying balances and flashed a system error message. The Central Bank of Paraguay immediately placed the digital lender into a resolution process and seized control after discovering that its solvency ratio had plummeted below half the legal minimum. Inspectors found high-risk loans extended to companies linked to the bank's owners, poor loan documentation, and expenses incorrectly recorded as assets.

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'Give Us Back Our Money!' Chaos in Paraguay as Crowds Besiege Shuttered Ueno Bank Branches After President Resigns | IBTimes UK

The bank's rapid ascent had made it a household name. Established from a decades-old finance company and rebranded under Grupo Vázquez, Ueno captured roughly 60% of the adult population as customers, sponsoring the national football team and plastering its logo across major stadiums. However, its growth coincided with the positioning of public assets. According to reporting from The Associated Press, the lender held roughly $800 million in public deposits, representing about a quarter of its total funds, which included monies from state pension schemes, health funds, and hydroelectric dam operators.

Public fury was immediate. Desperate depositors lined up outside locked bank branches across Asunción while others rushed to open accounts elsewhere, crashing competing mobile apps. Protesters took to the streets, clashing with riot police who deployed pepper spray and rubber bullets. Demonstrators held signs labeling Peña an enemy of savers and demanding accountability, while young bank employees in corporate uniforms burned credit cards outside the Labor Ministry to protest unpaid wages and lost jobs.

Political fallout materialized swiftly as opposition lawmakers and members of the governing conservative Colorado Party turned against the administration. Critics accused Peña of conflicts of interest because he held shares in Ueno's holding company until the previous year, and because he had appointed former financial figures from the institution to oversee regulatory bodies. Even former President Horacio Cartes, a powerful Colorado Party leader and political mentor to Peña, endorsed the impeachment push, stating that the party would not protect the plundering of public and pension funds, as reported by NPR.

Facing mounting pressure, Peña posted a video message on X announcing his departure. I want to apologise to the people if at any point I failed, he said, according to Nilepost. He maintained that his resignation was intended to preserve social peace and democratic stability, adding: It was never my intention to betray the trust you placed in me.

Minutes after his resignation announcement, the lower house voted 78–0 to impeach him. Opposition senators insisted on pushing forward with the Senate trial despite his resignation, arguing that stepping down voluntarily would preserve his eligibility to become a senator for life, granting him parliamentary immunity from criminal prosecution by Attorney General Emiliano Rolón Fernández's office. Prosecutors have already launched three criminal probes into the bank's oversight and detained eight senior executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale, while formally charging 27 officials with breach of trust and fraud.

Lawyers for the detained executives argued that senior management relied on staff for lending decisions, with José Fernández Zacur telling local media that board members do not personally decide individual loans, as noted by The Associated Press. Meanwhile, the currency suffered steep losses, with the guaraní dropping nearly 4% in a single day and approaching a 7% weekly decline amid the turmoil.

The constitutional line of succession points to Vice President Pedro Alliana to take over the executive office, though Congress must formally process the resignation and conclude the legislative proceedings. Further developments, including the Senate impeachment trial and the state guarantee fund's expedited payouts to depositors, will unfold in special sessions scheduled through the end of the week.