Paraguay's Senate voted 44-0 to remove President Santiago Peña for misconduct in office after Ueno Bank collapsed. Vice President Pedro Alliana was sworn in as president, and Peña was placed under house arrest.
Paraguay’s Senate removed President Santiago Peña from office on Friday in a unanimous vote of 44 senators present, following the collapse of Ueno Bank. Vice President Pedro Alliana was sworn in as president shortly after the vote.
The Senate voted to remove Peña for misconduct in office. The vote came three days after regulators seized Ueno Bank, cutting nearly 3 million customers off from their savings and bank cards.
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.
The lower chamber of Congress had voted 78-0 to impeach Peña and send the case to the Senate. Conviction requires 30 votes in the 45-member Senate.
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.
Prosecutors opened three criminal cases against Peña and other former officials related to the bank crisis. The attorney general’s office ordered Peña’s arrest on suspicion of breach of trust and other crimes. He was placed under house arrest at his home in Asunción until he can be brought before the economic crimes and anti-corruption unit.
An arrest warrant was also issued for Carlos Carvallo, the former central bank chief Peña appointed. It was not immediately clear whether Carvallo was in custody.
At least 27 people are facing criminal charges in relation to the scandal, including lead shareholder Miguel Vázquez. Six bank directors are in pretrial detention. Authorities seized nine luxury cars from Vázquez’s home, along with a yacht and small planes linked to him.
The Central Bank of Paraguay intervened in Ueno Bank before dawn on Tuesday after discovering critical solvency deficiencies. The bank’s solvency ratio had fallen below 50% of the required minimum.
Ueno had grown to be Paraguay’s fifth-largest bank by deposits, with $800 million in public money fuelling its growth. It had more than $800 million in public deposits and counted nearly two-thirds of Paraguay’s adults among its customers.
Deposits are insured up to about $37,000, which the central bank says covers nearly all of Ueno’s customers. The central bank calls the collapse an isolated case and insists the broader financial system is safe.
Alliana, 52, was sworn in as Paraguay’s 53rd president during an extraordinary congressional session. He previously served as vice president and as a former governor of the southern province of Ñeembucú and a former speaker of the lower house.
Alliana promised full financial compensation to millions of Paraguayans affected by the collapse. In his first executive directive, he instructed financial regulators to expedite payout schemes prioritized toward low-income accounts and small depositors hit hardest by the freeze.
Alliana is set to complete the remainder of the 2023-2028 presidential term. Prosecutors are also investigating him, and on Thursday lawmakers shelved an opposition bid to impeach him.
The collapse of Ueno Bank triggered Paraguay’s deepest political crisis in more than a decade, ending Peña’s presidency and leading to criminal investigations of the former president, current and former central bank and pension fund officials, and the new president. Millions of customers remain unable to access frozen savings while the new administration promises compensation.
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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