The collapse of Ueno Bank in Paraguay: President Peña’s resignation and the impeachment that followed

How the bank collapsed

Early on Tuesday morning, November 3, at around 03:24, the app of the Paraguayan digital bank Ueno stopped showing accounts to almost three million customers, displaying the message “We cannot show the balance.” At the same time, the Central Bank of Paraguay announced external administration and the beginning of the bank’s liquidation: as Euronews reported, the capital adequacy ratio had collapsed below 50%. According to the regulator’s data cited by Euronews, the inspection revealed poorly documented loans and expenses mistakenly recorded as assets; after the reporting was corrected, capital turned out to be half the legal minimum. The app, cards and transfers stopped working, branches closed, and crowds of people gathered at 75 branches across the country, including the head office in Asunción, trying to save their money.

What is frozen and who was affected

According to Euronews, the bank held about 850 million dollars in state funds, including the funds of the Social Security Institute (IPS), which provide pensions and health insurance for workers; Deutsche Welle gives a different figure — about 800 million dollars from the public sector, roughly a quarter of all deposits, including funds of hydroelectric plant operators. Deutsche Welle specifies that Ueno served about 2.94 million customers — roughly 60% of Paraguay’s adult population. Central bank board member Liana Caballero confirmed the complete shutdown of services; the authorities reminded people of the guarantee fund covering up to 75 minimum wages (about 37,700 dollars) per customer, but, as an Euronews correspondent observed, this did not calm the street. The consequences also hit the economy: the Association of Importers and Traders reported an instant 35% drop in sales at major retail chains, and the rush to open accounts at other banks on November 4 crashed their mobile apps.

Resignation and impeachment: a diverging timeline

President Santiago Peña announced his resignation on Thursday, November 5, in a video posted on X: he said he was stepping down for the sake of “the country’s stability, social peace and the preservation of democratic institutions,” and apologized to citizens, noting according to Anadolu , citing the newspaper ABC Color, that his priority is the return of depositors’ funds. The outlets describe the relationship between the resignation and the impeachment differently: Euronews writes that Peña resigned before the vote, which was to take place at the request of 35 deputies; Deutsche Welle reports that the resignation came while legislators were debating his removal; Life.ru, however, claimsthat the Chamber of Deputies voted unanimously for impeachment after the resignation, right during the session — the speaker of the lower chamber, Raúl Latorre, announced 78 votes “in favor” with no votes “against.” The case was sent to the Senate, which will hold public hearings. The charges concern “improper performance of duties”: conflict of interest, alleged misappropriation of pension funds and institutional cover-up by the central bank. According to Deutsche Welle, Peña owned shares in Ueno Holding until April 2025 and received two loans from the bank; his 2023 appointment of Carlos Carvallo — the former head of Financiero Ueno — as head of the central bank is also called into question; just 83 days after the appointment, Carvallo approved the company’s conversion into a bank.

Arrests and the political landscape

On Wednesday, eight top managers of the bank were detained, including founder Miguel Vázquez and, according to Deutsche Welle, bank president Juan Manuel Gustale; the prosecutor’s office brought charges — including breach of trust and attempted fraud — against 27 more bank officials and associated individuals. The resignation was preceded by the withdrawal of support within the ruling conservative Colorado Party: according to Deutsche Welle, Peña was opposed by Congress President Basilio Núñez and the party leader, former president Horacio Cartes, whom Anadolu describes as the president's political mentor. The crisis forced Peña to cancel his participation in the Ibero-American Summit in Madrid. The resignation came a little over two years before the end of the five-year term to which he was sworn in in August 2023. Noting the scale of the event, Euronews writes that over several years the bank grew from a little-known financial company into a nationwide brand that sponsored Paraguay's national football team and the country's main stadium. Considerable uncertainty remains: the outlets differ even on Paraguay's population (Euronews — 'just over six million', Anadolu — about 6.5 million, Gazeta.uz, citing the BBC, — 'just over seven million'), and the final decision on the impeachment has not yet been made — it must be handed down by the upper chamber.