Paraguayan Senate Removes President Peña After Ueno Bank Collapse

Senate removes president

Paraguay's Senate removed President Santiago Peña from office on Friday over the collapse of Ueno Bank, a digital lender tied to his government. In a unanimous vote, the 44 senators present voted to remove Peña for misconduct in office. The vote came three days after regulators seized Ueno Bank, freezing nearly 3 million customers' access to their savings.

Peña had submitted his resignation on Thursday, but Congress did not accept it. His lawyers, Ricardo Preda and Adolfo Ferreiro, argued that lawmakers should have approved his departure instead of pressing ahead with the impeachment trial. Opposition lawmakers insisted on removal to prevent him from leaving office with immunity.

New president sworn in

Vice President Pedro Alliana was sworn in as Paraguay's new president shortly after the Senate's verdict. Alliana, who previously served as vice president, assumed office during an extraordinary congressional session. He promised full financial compensation to Paraguayans affected by the bank collapse.

"What I come to promise is concrete: those compatriots who today are going through a difficult moment as a result of this financial disaster will be fully compensated. We will not leave them alone," Alliana said in his presidential address.

Legal actions and frozen accounts

Minutes after his conviction in the Senate, Peña was arrested at his private residence in Asuncion. The Prosecutor's Office requested Peña's immediate detention on charges of conflict of interest, illegal negotiations and alleged embezzlement linked to the collapse of Ueno Bank.

Prosecutors have charged 27 people, including Ueno's controlling shareholder, Miguel Vázquez, with crimes including breach of trust and attempted fraud. Six bank directors are in pretrial detention. Authorities have seized nine luxury cars from Vázquez's home, along with a yacht and small planes linked to him.

Ueno's closure has frozen the assets of 2.94 million clients, representing nearly half of Paraguay's population, as well as major public institutions and pension funds, including the state-run Social Security Institute. Deposits are insured up to about $37,000, which the central bank says covers nearly all of Ueno's customers. It calls the collapse an isolated case and insists the broader financial system is safe.

Why it matters

The removal bars Peña from the lifetime Senate seat granted to elected former presidents under Paraguay's Constitution, denying him the parliamentary immunity that would accompany it. Alliana is set to complete the remainder of the 2023-2028 presidential term as Paraguay struggles to stabilize its financial sector amid widespread public unrest.

Sources

• adn.com: Paraguay Senate removes President Santiago Peña from office following Ueno bank collapse - Anchorage Daily News
• aa.com.tr: New Paraguayan president promises full compensation after bank collapse following predecessor’s impeachment
• newscord.org: Santiago Peña Ousted, Placed Under House Arrest After Ueno Bank Crisis; Pedro Alliana Sworn In: 79 outlets compared | NewsCord
• abcnews.com: Paraguay President Santiago Peña resigns following bank collapse - ABC News
• africanews.com: Africanews | Paraguay VP Alliana sworn is as president after predecessor impeached
• ny1.com: Paraguay's Pedro Alliana sworn in as president after Senate removes Santiago Peña from office

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.