Paraguayan President Impeached Following Bank Collapse

Paraguay faces a significant political and financial crisis after the impeachment and house arrest of President Santiago Peña. The incident follows the collapse of the U.S.-owned Ueno Bank, impacting millions of Paraguayan citizens.

Santiago Peña, a pro-market leader and Washington’s ally in the region, came under scrutiny after the bank’s collapse. Ueno Bank, a digital lender, had around 3 million customers, representing more than half of the adult population in Paraguay. It was noted for offering attractive cashback deals on groceries and helping over a million people open accounts for the first time. However, legislators accused Peña of jeopardizing state assets and personally benefiting from his connection to the bank.

The situation escalated with Peña’s trial proceeding, where he appeared before prosecutors. He denied any wrongdoing but attempted to resign on Thursday, only for lawmakers to reject his resignation. They proceeded with his impeachment on Friday, with the Senate finding him guilty of malfeasance in office.

After being found guilty, prosecutors charged Peña with a breach of trust among other accusations and placed him under house arrest. In a statement shared on social media, Peña expressed remorse, apologizing to the people of Paraguay saying, “I want to apologize to the Paraguayan people if I have failed you.”

Subsequently, Vice President Pedro Alliana was sworn in to complete Peña’s presidential term, which lasts until August 2028. Alliana pledged to take measures to compensate those who lost money due to the bank collapse.

Ueno Bank’s solvency ratio, an indicator of long-term financial viability, failed to meet legal requirements. Consequently, Paraguay’s central bank took control of the institution. The financial turmoil led to widespread protests in Asunción, the capital city, as citizens demanded answers and accountability.