Paraguayan Senate Removes President Peña After Ueno Bank Collapse

Senate removes president

Paraguay's Senate voted to remove President Santiago Peña for misconduct in office after the collapse of Ueno Bank. The vote was unanimous, according to CBS News. Peña had offered to resign on Thursday, but Congress did not accept it and proceeded with an impeachment trial. He was replaced by Vice President Pedro Alliana, who began naming a new Cabinet on Saturday and was sworn in to serve the remainder of Peña's term, which ends in August 2028.

Criminal charges and custody

Prosecutors charged Peña with breach of trust and administration for personal gain. A judge ordered him held in pretrial custody at a military facility and froze his assets. Former Central Bank chief Carlos Carvallo faces the same charges, plus one of falsifying government documents, and was also ordered held in pretrial detention. Peña has pleaded not guilty and denied wrongdoing. His lawyer, Ricardo Preda, denied the charges and said that in Paraguay it is a minister, not the president, who decides where government money is deposited.

Ueno Bank collapse

Regulators seized Ueno Bank on Tuesday, freezing accounts and leaving millions of customers unable to access their money. The bank had approximately 1.8 million depositors and 2.9 million customers, around 60% of Paraguay's adult population. The Social Security Institute, known as IPS, had around $355 million invested in Ueno, roughly 9% of its portfolio. The bank also held more than $800 million in government funds.

By Saturday, authorities said almost 1.2 million customers had received an advance payment under the state's deposit guarantee fund. Under Paraguayan law, deposits of up to $37,000 are insured, which the Central Bank says covers 97% of Ueno's customers. The Central Bank called the collapse an isolated case and insisted the broader financial system is safe.

Political context

Peña, who came to power in 2023, held shares in Ueno Holding, the bank's holding company, until he sold them in March 2025. In his asset declaration submitted weeks after taking office, he listed shares valued at around $845,000, representing around 1.6% of the company's paid-up capital. He also appointed Carlos Carvallo, who had led Ueno Bank, to run Paraguay's Central Bank in 2023.

Prosecutors allege that while president, Peña used his position to influence public agencies and state-owned entities to maintain deposits with the bank despite his connections to its parent group. The Central Bank said it has started paying out money to Ueno customers and that more than 50 percent have recovered their funds.

Sources

• cbsnews.com: Paraguay's ousted president under house arrest after bank collapse leaves millions locked out of accounts - CBS News
• apnews.com: Paraguay's ousted President Peña questioned over bank collapse | AP News
• france24.com: Paraguay’s impeached president charged over business links to bank collapse - France 24
• nypost.com: Paraguay President Peña under investigation over bank collapse, faces removal from office
• klcc.org: How a bank collapse left millions in limbo and toppled Paraguay's president

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