Santiago Peña stepped down as president of Paraguay on Thursday, according to Corriere della Sera, after the failure of Ueno Bank froze the accounts of roughly three million customers — close to half the country's population — and set off street protests. The conservative leader, an ally of Donald Trump, had held shares in the bank until March 2025, the newspaper reports. Congress had already opened impeachment proceedings against him over an alleged conflict of interest, and the move was subsequently approved unanimously.
His vice-president, Pedro Alliana, has taken over the presidency on an interim basis.
Why it matters
Paraguay had spent years marketing itself as a stable, low-tax destination for foreign capital, with rates that often stay under 10%, and the Ueno collapse now threatens that reputation along with the savings of millions of ordinary depositors. Corriere della Sera notes that the crisis could also spread to neighbouring countries. The bank's failure has left tens of thousands of pensioners facing the possibility of missing their monthly payments, and long queues formed outside branches before customers took to the streets to demonstrate.
The political fallout is equally severe. Peña, who in 2023 became the youngest president ever elected in Paraguay, had promised to renew both the country and the Partido Colorado, which has held power across 135 years of dictatorship and democracy. Instead, questions about his business ties brought him down.
How the collapse unfolded
According to Corriere della Sera, supervisors had spent recent months flagging a sharp deterioration in the bank's solvency indicators. They also identified irregularities in lending to companies connected to the bank's owners, in amounts well beyond legal limits. Ueno Bank belonged to the Vázquez Group.
The crisis came to a head on Tuesday, when the Central Bank — led by a former head of Ueno Bank whom Peña had appointed in 2023 — began liquidation proceedings. Branches were shut immediately, and withdrawals, transfers and deposits were blocked. Eight bank executives were arrested, and Carlos Carvallo, the Central Bank's president, resigned.
According to the newspaper, the bank held deposits worth 2,836 billion dollars as of September and occupied an important place in the national financial system. It also managed 850 million dollars in public funds, a figure Peña's political opponents say his connection to the institution helped it obtain. Of that public money, 380 million dollars belonged to the social security institute and is tied to 32,000 retirees.
Paraguay has a guarantee fund that should cover 97% of account holders, Corriere della Sera reports, but the fate of customer money remains the central concern.
A forced exit
In a video message posted on X announcing his resignation, Peña apologised to Paraguayans but accepted no responsibility for the banking crisis, saying it had never been his intention to betray the trust placed in him. Corriere della Sera describes the resignation as unavoidable once Congress, with the backing of his own party, moved ahead with impeachment.
Coverage of the collapse dominated outlets across the country. Il Fatto Quotidiano reported that the bank's failure had engulfed the president, RaiNews covered the resignation and the demonstrations, and Il Post described the episode as a banking scandal that forced a head of state from office. ANSA reported that the congressional majority walked out of the chamber, derailing a vote on Peña's resignation.
What happens next depends on whether the guarantee fund can actually reimburse depositors and whether the interim government can restore confidence in a financial system that was, until this week, one of Paraguay's main selling points to investors.
