Paraguay Bank Crisis Deepens as President Peña Announces Resignation

The collapse of Ueno Bank has left millions of customers, including pensioners, unable to access their money. The fallout has reached the highest levels of government, with opposition lawmakers seeking impeachment and senior banking officials facing arrest warrants

Millions of Paraguayans have been unable to access their bank accounts after the collapse of Ueno Bank, a financial institution linked to President Santiago Peña. The crisis has triggered street protests in Asunción, arrest warrants for eight senior bank executives and a political confrontation that culminated in Peña announcing his resignation.

In a video posted on X, Peña apologized to the public for failing to meet expectations and said he had never intended to betray the trust placed in him. His announcement came a day after opposition lawmakers called for his impeachment over the bank’s collapse.

The immediate impact has fallen on Ueno’s customers, among them large numbers of pensioners who have found themselves unable to withdraw their savings. The bank says it has more than three million customers — nearly half the country’s population — and manages millions of dollars in pension payments and other state funds.

The scale of the disruption became visible on the streets of Asunción. On Tuesday and Wednesday, customers gathered outside Ueno branches in long lines, trying to recover their money. Protests followed as anger mounted over the suspension of banking services and uncertainty about when deposits would be returned.

The Central Bank has taken control of Ueno, citing a severe capital shortfall. It said the intervention was intended to protect depositors and preserve the stability of the financial system. The bank’s services have been suspended while authorities organize the repayment of deposits and begin liquidation proceedings.

Peña had sought to contain the public anger before announcing his resignation. In an earlier video message, he insisted that Paraguay’s financial system remained solid and had institutions and safeguards capable of managing the crisis. He also promulgated a law intended to allow depositors to recover part of their money from guarantee funds as quickly as possible.

Under the new measure, payments are to be made within five days.

The crisis has also shaken the country’s financial leadership. At Peña’s request, Central Bank President Carlos Carvallo resigned on Tuesday. Carvallo had previously headed Ueno Bank.

Meanwhile, arrest warrants were issued for eight senior Ueno executives, including the bank’s chairman, Miguel Vazquez, who turned himself in to police.

The intervention, the suspension of services and the liquidation process have left the authorities facing an urgent challenge: restoring access to deposits held by millions of customers while containing the wider consequences of the bank’s collapse.

(Photo: © AndKronos)