Paraguayan Senate removes President Santiago Peña after Ueno Bank collapse

Impeachment and arrest

Paraguayan authorities placed ousted President Santiago Peña under house arrest on Friday, shortly after the Senate removed him from office over the collapse of Ueno Bank, which locked nearly half of Paraguay's 6 million people out of their savings. All 44 senators present voted to remove Peña for misconduct in office.

Peña is due to be questioned on Saturday over allegations of breach of trust, influence peddling, and misappropriation of funds, prosecutor Silvia Margarita Gonzalez Vester said. Peña has denied wrongdoing.

New president sworn in

Vice President Pedro Alliana was sworn in as president Friday to serve out the term, which ends in August 2028. “The Paraguay we receive today has urgent needs,” said Alliana, who is also under investigation in connection with the bank.

Bank collapse and fallout

Regulators seized Ueno Bank three days before the Senate vote. When regulators seized the bank, Ueno customers could no longer withdraw cash, access their savings or use their cards to buy anything. The digital lender had more than $800 million in public money turbocharging its expansion and signed up more than two-thirds of the country’s adults.

Deposits are insured up to about $35,000, which the central bank says covers 97% of Ueno’s customers. Some depositors began recovering their money Thursday, starting with those holding up to 10 million guaraníes (about $1,500).

Prosecutors have charged 27 people, including Ueno’s founder and former CEO Miguel Vázquez, with crimes such as breach of trust and attempted fraud. A judge has ordered six former directors, Vázquez among them, held in pretrial detention, and two others confined to their homes with electronic monitors. Authorities have seized luxury cars, a yacht and two small planes linked to Vázquez.

Why it matters

The collapse of Ueno Bank triggered Paraguay’s worst political crisis in more than a decade and led to the removal of a sitting president by impeachment. The crisis has left depositors without access to savings, caused a ride-hailing app reliant on Ueno to shut down leaving 3,000 drivers without work, and contributed to losses in Paraguay’s bonds and a slide in the guaraní against the dollar.

Sources

• france24.com: Ousted Paraguay president under house arrest after bank collapse - France 24
• bbc.com: Paraguay's President Santiago Peña impeached and arrested

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