Paraguay's central bank chief resigns at president's request as digital lender crisis deepens
ASUNCION, Nov 3 - Paraguay's central bank head submitted his resignation on Tuesday at President Santiago Peña's request, as authorities launched resolution proceedings for digital lender ueno.
The case has piled pressure on Peña's government and threatens the reputation that has helped Paraguay become one of South America's emerging destinations for foreign capital, much of it from neighboring Brazil.
asserted
Paraguay → resign → Brazil
Peña said he had requested central bank President Carlos Carvallo's resignation in light of facts that emerged throughout the day.
asserted
that → say → day
Paraguay's prosecutor's office requested a criminal investigation into the events surrounding ueno and ordered the arrests of eight people linked to the bank.
asserted
office → request → bank
Carvallo said he would remain in office during ueno's resolution proceedings.
asserted
he → say → proceedings
The central bank and Carvallo, who headed the fast-growing digital bank until August 2023, have faced criticism from lawmakers over how they supervised the lender, and over its ties to Peña.
asserted
they → head → Peña
Paraguay's president was a business partner of the group that owned the bank until March 2025.
asserted
that → own → March
Concerned customers, including pensioners who receive state benefits through ueno, stood outside closed bank locations on Tuesday seeking access to their savings.
asserted
who → include → savings
"We're demanding access to money we have here at ueno bank," said Manuel Cáceres from Ñemby, on the outskirts of the capital, Asunción.
asserted
Cáceres → demand → capital
"Unfortunately, a lot of people, myself included, are spending the morning like this," he said.
asserted
he → include → this
Peña also announced an agreement with congressional leaders to fast-track a bill authorizing the use of the national Guarantee Fund to make payments to depositors.
asserted
Peña → announce → depositors
The president said the law would also ensure the return of public money and funds held by the IPS social security institute and other public pension funds.
asserted
law → say → institute
"Stepping aside will help to quell the controversy surrounding the BCP (Central Bank of Paraguay)," Carvallo told a press conference after the resolution proceedings were announced.
asserted
proceedings → step → conference
Resolution proceedings are aimed at protecting depositors and preserving financial stability.
asserted
proceedings → aim → stability
He said his resignation would allow the central bank and the banking superintendent's office to carry out their work without political and media disputes distracting them.
asserted
disputes → say → them
INVESTORS ON EDGE
Ueno, majority-owned by Grupo Vázquez, has around 3 million customers and administers some $850 million in public funds in Paraguay.
asserted
INVESTORS → own → Paraguay
It has grown rapidly from a niche local fintech player into a mid-tier bank, following a path similar to digital platforms such as Monzo and Nubank.
asserted
It → grow → Monzo
In recent months, it has faced regulatory scrutiny over alleged excessive lending to companies with ties to Grupo Vázquez, unsettling investors and weighing on both ueno's 2031 dollar bonds and Paraguay's sovereign bonds.
asserted
it → face → bonds
Grupo Vázquez and bank ueno did not immediately respond to requests for comment.
asserted
Vázquez → respond → comment
The central bank said the ueno case was isolated and did not point to broader problems in the financial system.
asserted
case → say → system
Peña reinforced this, saying: "This is a particular case of one entity, not of the national financial system."
asserted
This → reinforce → system
He added that those responsible "must answer before the Judiciary, without exceptions and without privileges.
asserted
those → add → privileges
The Superintendency of Banks will appoint auditors to verify ueno's asset position, the central bank said.
asserted
bank → appoint → position
Several lawmakers have in recent months called for the dismissal of the central bank's senior management after rejecting a report on the lender that they said was incomplete.
asserted
they → call → lender
The Aporia
