Paraguay President Santiago Peña resigns following bank collapse
Paraguay President Santiago Peña resigns following bank collapse
ASUNCIÓN, Paraguay --
asserted
Peña → resign → collapse
Paraguay President Santiago Peña resigns following bank collapse.
asserted
Peña → resign → collapse
Hours after Paraguay’s central bank seized Ueno Bank, a major digital lender that went from an obscure finance company to a household name in less than five years, President Santiago Peña was facing impeachment, protesters were clashing with riot police and the bank's executives had been detained.
asserted
executives → seize → police
The swift collapse of a bank that claimed more than 60% of Paraguay’s adults as customers has sent shock waves through the country’s financial system.
asserted
that → claim → system
By Thursday morning, a rebellion by several members of Peña's own conservative Colorado Party had become a party-wide revolt.
asserted
rebellion → become → Party
Both of the ruling party’s main factions in the lower house pledged to back impeachment, with a debate scheduled for Thursday, after former President Horacio Cartes, the party’s powerful leader, withdrew his support for Peña.
asserted
Cartes → rule → Peña
Impeachment requires a two-thirds majority of lower house lawmakers present to send the case to the Senate, where another two-thirds vote would be needed to remove Peña, a 47-year-old former International Monetary Fund economist.
asserted
vote → require → Peña
On Wednesday, before his own party turned against him, Peña had sought to move past the scandal in a video message, accepting no blame and promising to protect depositors’ savings.
asserted
Peña → turn → savings
He also approved emergency payouts to depositors Wednesday and named a new central bank chief.
asserted
He → approve → chief
“Paraguay needs institutions that provide answers and protect our people’s resources,” he said.
asserted
he → need → resources
The political upheaval and promises of relief leave a bigger question unanswered: how a bank linked to the president, who until last year had a stake in Ueno’s holding company, could grow so rapidly in size and importance despite repeated warnings about its dubious lending practices.
uncertain
who → leave → practices
For many Paraguayans, the answer lies in the uncomfortable proximity of Peña’s long-ruling Colorado Party to the country’s regulators and business elite, a weakness that has endured even as steady economic management and rapid growth made Paraguay a darling of international investors in recent years.
asserted
Paraguay → lie → years
“Santiago Peña and the Colorado Party have stolen all our savings,” said Luis Pineda, one of the protesters marching to Congress on Wednesday.
asserted
Pineda → steal → Wednesday
“We are fed up with 70 years of plunder.”
asserted
We → feed → plunder
Soon after winning its banking license in 2023, Ueno seemed to be everywhere in Paraguay.
asserted
Ueno → win → Paraguay
The digital lender, a rebranded version of a decades-old finance company, lured customers with generous cash-back offers on groceries, grew to more than 70 locations, sponsored Paraguay's national soccer team and plastered its name on the country's main stadium.
asserted
lender → rebrande → stadium
Government money poured into Ueno’s coffers under Peña.
asserted
money → pour → Peña
He also appointed Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank, the agency charged with supervising the digital lender.
asserted
He → appoint → lender
As of last month, Ueno reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the state pension and health fund and the operators of Paraguay’s giant hydroelectric dams.
asserted
Ueno → hold → dams
Even as retirees’ savings and other public money piled up at Ueno, worries were escalating inside the central bank.
asserted
worries → pile → bank
In June, its inspectors found a pattern of risky lending to insiders, reported ABC Color, a leading Paraguayan newspaper.
asserted
Color → find → insiders
Ueno had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral to cover the debts if they went bad.
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they → extend → debts
On a single day in September 2025, nearly $39 million had gone to three such companies.
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million → go → companies
Peña repeatedly brushed off the warnings.
asserted
Peña → brush → warnings
As recently as last month, he defended Ueno and the central bank’s oversight, dismissing the concerns as a smear campaign that was spooking the public.
asserted
that → defend → public
But on Monday, it all came crashing down.
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it → come → Monday
Regulators investigating Ueno’s loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets.
asserted
bank → investigate → assets
Once the books were corrected, Ueno’s capital, the cushion banks must keep to absorb losses, fell to less than half the legal minimum.
asserted
banks → correct → minimum
The central bank seized the lender Tuesday and announced plans to move customers’ accounts, along with whatever assets still hold value, to other banks before liquidating what’s left.
asserted
what → seize → banks
Ueno’s app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside with no way to cash out their savings.
asserted
branches → go → savings
On Wednesday, a rush to open new accounts elsewhere crashed other banks’ mobile apps, fueling public panic.
asserted
rush → open → panic
Officials appealed for calm and said they had begun repaying depositors, opening new accounts elsewhere for about 280,000 who had banked only with Ueno.
“The banking system is sound,” insisted Pedro Acosta Bernal, appointed interim central bank president Wednesday after Carvallo resigned at Peña’s request.
asserted
Carvallo → appeal → request
Authorities have detained eight senior Ueno executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale.
asserted
Authorities → detain → Vázquez
Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud.
asserted
Prosecutors → charge → trust
Lawyers for several of the detained said they needed time to review the allegations before they could comment.
uncertain
they → detain → allegations
Hundreds of employees of Ueno Bank and other companies belonging to Grupo Vázquez, the bank’s parent conglomerate, protested outside the Labor Ministry on Thursday, demanding severance and unpaid wages with their jobs in limbo and their salaries trapped at the failed bank.
asserted
Hundreds → belong → bank
A day earlier, hundreds of retirees, depositors, university students and workers flooded the streets of Asunción, the capital.
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hundreds → flood → Asunción
“We want your head, Peña!” they shouted.
asserted
they → want → head
Their signs demanded Peña’s impeachment, called him “the enemy of savers” and pleaded “Give us back our money.”
asserted
signs → demand → money
Riot police fired pepper spray and rubber pellets to push back the crowds.
asserted
police → fire → crowds
…and 6 more, not listed.
The Aporia
