Paraguay President Santiago Peña Resigns as Banking Crisis Sparks Political Chaos

ASUNCIÓN, Paraguay - Paraguayan President Santiago Peña has submitted his resignation following a major banking crisis that has plunged the South American nation into political and financial turmoil, leaving millions of customers unable to access their savings.

Peña announced his decision on Thursday, November 5, as lawmakers prepared to advance impeachment proceedings against him over the collapse of Ueno Bank, a major digital lender with financial links to the president.

However, his resignation has not yet been formally accepted by Congress. Lawmakers have put the resignation process on hold while moving forward with impeachment proceedings, meaning Peña remains provisionally in office as the political situation develops.

The crisis has triggered protests across the country, raised concerns about the protection of public funds and intensified scrutiny of the relationship between political leaders and financial institutions.

Ueno Bank Collapse Leaves Millions Without Access to Savings

At the centre of the crisis is Ueno Bank, a rapidly expanding digital financial institution that reportedly served approximately three million customers across Paraguay.

The Central Bank of Paraguay took control of the lender after identifying serious financial weaknesses, including a capital shortfall that placed the institution below regulatory requirements.

The intervention disrupted banking services, leaving customers temporarily unable to access their accounts, savings and other financial services.

The bank reportedly managed between $800 million and $850 million in public funds, including deposits linked to government institutions and pension-related entities.

The sudden disruption sparked anxiety among customers, with long queues forming outside branches as people attempted to withdraw their money.

The situation also affected other financial institutions as customers rushed to move their funds, placing additional pressure on banking applications and payment services.

President's Financial Links Raise Conflict-of-Interest Questions

Peña has come under intense political scrutiny because of his previous financial links to Grupo Vázquez, the business group associated with Ueno Bank.

The president reportedly held shares in the group's holding company before selling his stake in March 2025.

Opposition lawmakers have questioned whether political connections influenced the bank's rapid expansion and access to public funds during Peña's administration.

Critics have also raised concerns about the appointment of former Ueno executive Carlos Carvallo to lead the country's central bank, the institution responsible for regulating financial institutions.

Peña has denied wrongdoing and maintained that the bank's problems should be addressed through the country's legal and regulatory institutions.

The allegations remain subject to investigation and should not be treated as established criminal findings.

Impeachment Proceedings Move Forward

Political pressure intensified after members of Peña's own Colorado Party withdrew their support amid growing public anger.

Lawmakers in the Chamber of Deputies voted unanimously to advance impeachment proceedings against the president on Thursday.

Peña announced his resignation shortly before the vote was completed, saying his decision was motivated by the need to protect national stability, social peace and democratic institutions.

In a public statement, he also apologised to Paraguayans who felt let down by the crisis and expressed hope that customers affected by the bank's collapse would recover their funds.

However, lawmakers have continued with the impeachment process rather than immediately accepting his resignation.

The proceedings could determine whether Peña is removed from office and faces further legal consequences.

Protests Erupt Across Paraguay

The banking crisis has triggered demonstrations in the capital, Asunción, and other parts of the country.

Angry customers and opposition supporters have gathered outside government institutions, demanding the return of their savings and accountability from those responsible for the bank's collapse.

Some demonstrations have turned confrontational, with security forces using tear gas and water cannons to disperse protesters.

For many affected families, the crisis is more than a political dispute. Frozen savings have disrupted access to everyday necessities, while pensioners and workers worry about the security of their money.

The uncertainty has also raised concerns about confidence in Paraguay's financial institutions.

Government Promises to Protect Depositors

Authorities have moved to reassure the public that measures are being taken to protect customers and facilitate the recovery of eligible deposits.

The Central Bank has said its intervention is intended to safeguard depositors and preserve financial stability.

The government has also announced measures aimed at facilitating the return of funds, although customers remain concerned about when they will regain full access to their accounts.

The crisis has prompted calls for transparent investigations into the bank's operations, its lending practices and the handling of public funds.

What Happens Next?

Paraguay now faces two closely connected challenges: resolving the banking crisis and determining the country's political leadership.

Vice President Pedro Alliana is constitutionally positioned to assume the presidency if Peña's departure is formally completed.

However, the ongoing impeachment process and the uncertainty surrounding the acceptance of Peña's resignation have complicated the transition.

Authorities must also address the financial consequences of Ueno Bank's collapse, including protecting depositors, investigating potential wrongdoing and restoring confidence in the banking sector.

For Paraguayans, the immediate concern remains recovering their savings and ensuring that those responsible for any financial misconduct are held accountable.