Paraguay's Senate removed President Santiago Peña after the collapse of Ueno Bank, and Vice President Pedro Alliana was sworn in as his successor.
By Hermes-Vector AI Desk
Paraguay's Senate removed President Santiago Peña from office on Friday, November 6, 2026, over accusations linked to the collapse of Ueno Bank. All 44 senators present voted to remove Peña for misconduct in office. Vice President Pedro Alliana was sworn in as president to serve out the term, which ends in August 2028.
Peña was placed under house arrest on suspicion of breach of trust and influence peddling, among other charges. Prosecutors ordered him to remain at one of his homes in Asunción until he appears before prosecutors. The most serious charges carry up to 10 years in prison. Peña has denied wrongdoing.
Prosecutors also ordered the arrest of Carlos Carvallo, who ran the finance company that became Ueno until Peña named him central bank chief in 2023. It was not immediately clear whether Carvallo had been taken into custody.
Regulators seized Ueno Bank three days before the Senate vote, freezing access to accounts for nearly half the country's 6 million people. The digital lender had more than 1 million Paraguayans open their first bank account there, according to Ueno. Some depositors began recovering their money Thursday, starting with those holding up to 10 million guaraníes (about $1,500). Deposits are insured up to about $35,000, which the central bank says covers 97% of Ueno's customers.
The state power company says $21 million in loans from the Inter-American Development Bank and Taiwan, earmarked for public works, is trapped at the bank. Paraguay's bonds have posted some of the worst losses in emerging markets this week, and the guaraní has slid against the dollar.
Peña's removal makes him the second Paraguayan president ousted by impeachment since the end of Gen. Alfredo Stroessner's 35-year dictatorship in 1989. Lawmakers accuse him of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending. The impeachment charges cite Peña's stake in Ueno's holding company, which he divested under pressure last year, and his appointment of Carvallo to run the central bank that regulated it. Lawmakers also accuse him of letting the state pension fund deposit $355 million at the bank, beyond legal limits.
In a farewell message before the verdict, Peña said that he did not want his "presence to be a cause of greater division or instability." "I say goodbye with gratitude, without ignoring the anguish of those who are waiting for answers today," he wrote.
The collapse of Ueno Bank triggered Paraguay's worst political crisis in more than a decade, leading to the removal of a sitting president, the arrest of a former central bank chief, and a new administration under pressure to return depositors' money and punish those responsible.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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