Paraguay President Santiago Peña Resigns After Ueno Bank Collapse Freezes Millions of Accounts

Paraguayan President Santiago Peña announced his resignation on November 5, 2026, hours after the lower house of Congress began impeachment proceedings triggered by the collapse of Ueno Bank. The digital lender, which served about three million customers in a country of 6.5 million people, had its accounts frozen after the central bank found it had breached solvency rules.

Peña said in a video address that he was stepping down to protect the country's stability, social peace and democratic institutions. He apologized to Paraguayans if he had failed them at any point and said his priority was ensuring the return of funds held at the bank. Vice President Pedro Alliana is next in line to assume the office.

The central bank intervened in Ueno on November 3 after determining the lender's capital had fallen below half the legal minimum once accounting problems and risky loans were corrected. Regulators seized the institution and began plans to transfer customer accounts and remaining assets to other banks. Ueno administered close to $850 million in public funds, including pensions and other state deposits. Government deposits at the bank had risen from zero when Peña took office in 2023 to more than $800 million earlier this year.

Peña had been a shareholder in Grupo Vázquez, the holding company that controlled Ueno, until March 2025. Lawmakers from both the opposition and his own Colorado Party accused him of conflicts of interest, misuse of pension funds and institutional cover-ups. The central bank chief, a former Ueno executive appointed by Peña, had already resigned earlier in the week. Eight Ueno executives were detained.

Protests filled streets in Asunción for three days. Demonstrators demanded access to their savings and Peña's removal. Police used tear gas and water cannons near the Congress building. The lower house voted unanimously to pursue impeachment minutes after Peña submitted his resignation. The Senate later failed to reach quorum on whether to accept the resignation or remove him by force, leaving the transition incomplete into the evening of November 5.

Ueno had grown rapidly from a niche financing company into a mid-tier bank used by roughly 60 percent of adult Paraguayans. Customers could not withdraw cash, use debit cards or access accounts after the intervention. Long queues formed at other banks as depositors sought to open new accounts. The guarani fell 5.2 percent against the dollar.

Peña, a conservative economist and ally of U.S. President Donald Trump, took office in August 2023. He had dismissed earlier scrutiny of Ueno's finances. The bank's rapid expansion, large public deposits and Peña's past ownership stake created the conditions that lawmakers said required his departure. Authorities said they would accelerate deposit insurance payments and protect public funds.

The resignation removes a Trump-aligned leader in South America at a moment when the United States is managing its own political transition after midterm elections. Paraguay's central bank and remaining government must now complete the transfer of Ueno accounts while restoring confidence in the financial system. Depositors still wait to learn when they will regain full access to their money.