Asunción, 5 November 2026 — Paraguay faces an unprecedented political and financial earthquake after President Santiago Peña announced his resignation amid the catastrophic collapse of Ueno Bank and mounting accusations of institutional mismanagement. The decision, revealed in a televised address, comes just days before lawmakers were scheduled to vote on his impeachment, leaving the nation in uncharted territory.
The resignation marks the climax of a week-long turmoil triggered by the sudden closure of Ueno Bank, a financial giant serving nearly half the country’s population, whose freezing of accounts left millions of depositors, retirees, and pensioners stranded without access to their funds.
From banking meltdown to political earthquake
The crisis ignited when Paraguay’s central bank intervened and suspended Ueno Bank’s operations after discovering critical solvency issues. Official reports revealed the institution’s capital adequacy ratio had plummeted below the required 50%, jeopardising its ability to meet financial obligations. The shutdown triggered immediate panic, with long queues forming outside branches as angry depositors demanded answers.
Ueno Bank was no ordinary lender — it managed a vast share of the country’s public funds, including social security payouts and pension reserves. Estimates suggest hundreds of millions of dollars in public money were at risk, deepening the crisis and eroding public trust in government oversight.
Shadows over integrity: Peña’s ties to the scandal
The president’s past connections to the banking group that once controlled Ueno Bank have come under sharp scrutiny. Peña held shares in the group before selling them in 2025, but opposition figures allege those ties compromised regulatory judgement and exposed public funds to undue risk.
Critics accuse the administration of failing to act on early warnings about Ueno Bank’s financial health and favouring private interests over public stability. These claims have dominated political debate, overshadowing the banking crisis with allegations of cronyism and regulatory failure.
The turmoil also claimed the Central Bank’s leader, Carlos Carvallo, who resigned after questions were raised about his past leadership role at Ueno Bank, further casting doubt on the independence of financial oversight.
Impeachment motion seals Peña’s fate
As opposition lawmakers accelerated plans for impeachment, Peña’s political support evaporated. The ruling Colorado Party, long a pillar of stability, withdrew backing, leaving the president politically isolated within hours. On the day of his resignation, the Chamber of Deputies voted to impeach him, with the Senate set to confirm the move in the coming days.
The collapse of Peña’s presidency has transformed a financial scandal into a full-blown constitutional crisis, questioning not only the stability of Paraguay’s economy but the credibility of its democratic institutions.
Alliana inherits a ticking time bomb
Vice President Pedro Alliana now assumes the presidency at a moment of severe crisis. His immediate priorities include restoring public confidence in the banking system, securing depositors’ assets, safeguarding public funds, and clarifying accountability for Ueno Bank’s failure.
Government officials have pledged rapid payouts to affected depositors and launched multiple judicial investigations targeting the bank’s former leadership. But beyond emergency measures, the nation is left grappling with a deeper question: how could a country long seen as a model of economic stability suffer such a spectacular institutional collapse?
For Peña, the resignation closes a chapter marked by failure and scandal. For Paraguay, it opens a precarious chapter in which healing public trust may prove harder than restoring economic stability. One thing is clear: this crisis will reshape the country’s political landscape for years to come.