Paraguay President Santiago Peña Arrested After Bank Collapse

Ueno Bank collapse freezes funds for 60% of adult population

S&P Global Ratings downgraded Ueno Bank S.A. from 'BB' to 'D'.

Congress rejects resignation and proceeds with impeachment

Santiago Peña announced his resignation as president on November 5, 2026. The Congress of Paraguay rejected the resignation. Legislators from the governing Colorado Party left a session without a quorum, which prevented the acceptance of the resignation due to a lack of votes. A presidential spokesperson said he did not know the whereabouts of Peña while Congress considered the resignation.

Both houses of Congress rejected the attempt to resign via X, choosing to continue the impeachment process. The Chamber of Deputies voted unanimously to initiate impeachment proceedings and later approved the political trial. The Senate also impeached the president.

Legal charges of breach of trust and influence peddling

Prosecutors charged Santiago Peña with breach of trust, influence peddling, and using his public position for personal gain. The Prosecutor’s office reported that Peña remained a shareholder of Ueno Bank for two years while serving as president. Peña denied these allegations and accused the newspaper ABC of manipulation, claiming he no longer held shares in Ueno Holding.

The Chamber of Deputies based the impeachment proceedings on a history of conflicts of interest linked to Peña’s ownership of the bank. The Central Bank of Paraguay received at least 10 warnings regarding the bank before it collapsed.

Authorities arrested Peña and Central Bank President Carlos Carvallo on charges of corruption and financial misconduct. Prosecutors detained Peña on 7 November 2026 for questioning regarding the breach of trust and management for personal gain. They also requested the provisional detention and asset freezing for both the former president and former Central Bank governor Carlos Cardozo. Each of the two criminal charges carries a maximum prison sentence of 10 years. Peña resigned from his position on 5 November 2026.

National protests erupt over frozen savings

The banking crisis triggered protests across the nation. Thousands of people protested against the president as he faced impeachment on 6 November 2026. Protests and repression occurred following the dissolution of Ueno Bank on 4 November 2026. Andrés Colmán Gutiérrez described the events as "El Noviembre Paraguayo," referring to the human tide that ousted a president who betrayed the country.

Protests against Peña resulted in seven people being arrested on 6 November 2026. Protesters demanding the return of their frozen savings clashed with police on 7 November 2026, as officers utilized tear gas and rubber bullets. Senator Jolanda Paredes demanded that the former president be sent to a high-security prison rather than his home, stating, "He must go, but not to his home; to a high-security prison".

Interim President Pedro Alliana pledges compensation for depositors

Interim President Pedro Alliana assumed office and pledged to compensate citizens affected by the bank failure. The Central Bank of Paraguay began paying guarantees to Ueno Bank depositors, prioritizing those with less than G. 10 million.

The BCP announced that it would pay an advance to depositors of Ueno Bank. ABC Color published details on how depositors can collect their guarantees and which banks are authorized to process them. As of Saturday, 1.2 million customers had received full or partial compensation for their insured deposits.

Political fallout and loss of party support

Prosecutors charged the former president in relation to the banking scandal.

Regarding the legal proceedings, Peña said, "Whatever the outcome of this process, I will act with responsibility and respect for the Constitution". The Colorado Party withdrew its support for the president as the crisis deepened.

Moody's issued a warning regarding the impact of the bank crisis on the financial system of Paraguay. Diario ABC reported that the country's ruin was caused by the "dangerous friendships" between the president and a banker. Earlier, the chief of the central bank resigned at the request of the president.

Historical data on Ueno Bank operations

Ueno Bank held roughly 4.8 billion Guar in August 2026. The bank had 1 million active credit cards as of 17 December 2024.

Nearly 28,000 IPS retirees and pensioners received their payments through the bank as of 24 October 2024. The Senate unanimously voted on Friday to convict and remove former Central Bank governor Carlos Cardozo from office for the collapse of Ocean Bank.