Paraguay President Santiago Peña Resigns After Ueno Bank Collapse Freezes Millions of Accounts

Paraguay’s President Santiago Peña resigned on Thursday, 5 November 2026, after the collapse of a digital bank left about 3 million people — almost half the country — unable to reach their own money. It is a remarkable fall for a president who took office only three years ago, and it happened in a single day: a video announcement, a unanimous vote to impeach him, and a country left asking when savers will get their money back.

Peña announced his decision in a recorded video posted on social media. He said he was stepping down “with the stability of our country, social peace, and the need to preserve our democratic institutions in mind,” according to Reuters. He also apologised to the public: “I want to apologize to the people if I have failed them at any point. It was never my intention to betray the trust that they placed in me.”

Minutes after the video appeared, Paraguay’s lower house of Congress voted 78-0 to impeach him, sending the charges to the Senate. Congressional leaders were expected to formally accept the resignation later on Thursday, clearing the way for Vice President Pedro Alliana to be sworn in as president without waiting for a Senate trial. Alliana would serve out the rest of Peña’s term, which runs until August 2028.

This article explains what happened, how a bank brought down a president, what happens to the frozen savings, and what comes next.

At a glance

• What happened: President Santiago Peña resigned on Thursday, 5 November 2026, after the collapse of digital bank Ueno froze the accounts of about 3 million customers.
• The vote: Minutes after his announcement, the Chamber of Deputies voted 78-0 to impeach him. The charges went to the Senate.
• The bank: Ueno grew from a small finance company into a bank used by more than 60 percent of Paraguay’s adults. It held roughly $800 million in public money, including state pension funds.
• The charges: Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud. Six executives, including the bank’s founder, were jailed pending trial.
• The savers: A state guarantee fund must repay stranded depositors within five business days, starting with small accounts. The fund covers balances up to about $36,000 per customer.
• What happens next: Vice President Pedro Alliana is expected to take over as president. Congress must formally accept the resignation and choose a new vice president.

A resignation announced on video

Peña’s resignation did not come out of nowhere. For days, protesters had marched on Congress in the capital, Asunción, demanding that he go. Opposition lawmakers had already moved to impeach him, and on Thursday his own party turned against him.

The final blow came from inside the Colorado Party, the party that has ruled Paraguay for most of the last 75 years. Horacio Cartes, the party’s leader and a former president who had been Peña’s mentor, backed impeachment. Cartes said the party would not side with “the plundering of public and private funds and pensioners’ money,” the Associated Press reported.

Peña, a 47-year-old economist who once worked at the International Monetary Fund, was elected in April 2023 and took office in August that year on a five-year term. He had built his image on steady economic management. Under his government, Paraguay won investment-grade credit ratings — a mark of trust from international lenders — and he became a close ally of United States President Donald Trump.

But he had also lost the trust of his own side. As the bank crisis deepened, members of his own conservative party withdrew their support. By Thursday, his position was no longer survivable, and he chose to resign rather than face a full impeachment trial.

He stopped short of accepting blame. In his video message, he described the crisis as a technical and regulatory problem that had been turned into a political fight, and he has repeatedly argued that any wrongdoing should be handled by the courts.

The bank that brought down a president

Ueno Bank started as a small financial technology company and, in less than five years, became a household name in Paraguay. It won its banking licence in 2023 and grew fast. It lured customers with generous cash-back offers on groceries, opened more than 70 branches, sponsored Paraguay’s national soccer team, and put its name on the country’s main stadium.

By the time it collapsed, Ueno had about 3 million customers in a country of only 6.5 million people. The Associated Press reported that it claimed more than 60 percent of Paraguay’s adults as customers. For many Paraguayans, Ueno was not just an app on a phone. It was where their salary arrived, where their pension was paid, and where their savings sat. Public money was at stake too: Ueno held roughly $800 million in public deposits, including state pension and health funds.

The trouble was how the bank was lending that money. In June, inspectors from the central bank found a pattern of risky lending to insiders, according to ABC Color, a leading Paraguayan newspaper. Ueno had lent large sums to companies tied to its own owners, beyond what the law allows, and without enough collateral — assets pledged as security — to cover the debts if they went bad.

The president’s own past was part of the problem. Peña had been a shareholder until March 2025 in Grupo Vázquez, the business group that controls Ueno. Opposition lawmakers accused him of conflicts of interest, misuse of pension funds, and covering up the way the bank’s collapse was handled. They also pointed to his appointments: he had named Carlos Carvallo, the president of Financiera Ueno — the predecessor company to Ueno Bank — to run the central bank, the very agency charged with supervising the lender.

As recently as last month, Peña defended Ueno and the central bank’s oversight, dismissing the concerns as a smear campaign that was frightening the public.

How the collapse unfolded

The end came quickly. On Monday, 2 November, regulators investigating Ueno’s loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets. Once the books were corrected, Ueno’s capital — the cushion of its own money that a bank must keep to absorb losses — had fallen to less than half of the legal minimum.

The central bank’s board voted late on Monday to place Ueno in “resolution” — in simple terms, to take it over. Officials took control on Tuesday, 3 November. The bank’s app, cards and transfers went dark, and its branches locked their doors. Desperate depositors lined up outside, unable to withdraw cash or pay for food.

The panic spread. On Wednesday, a rush to open new accounts at other banks crashed their mobile apps, fuelling more fear. The fallout also claimed the central bank’s chief, who resigned on Tuesday, and prosecutors issued arrest warrants for eight Ueno executives, who later turned themselves in. Their assets were frozen.

On Thursday, a judge ordered six Ueno executives jailed pending trial, including the bank’s founder, Miguel Vázquez, and the bank’s president, Juan Manuel Gustale. Two others were placed under house arrest. Prosecutors have charged 27 bank officials and business associates with breach of trust and attempted fraud, alleging that Ueno made large loans to related companies without adequate guarantees and diverted some of the money to other businesses in the group.

Gustale’s lawyer pushed back against the charges, arguing that senior executives had relied on staff for lending decisions. “The president or board is not responsible for deciding who receives a particular loan,” José Fernández Zacur told local media.

The human cost goes beyond frozen accounts. The Labor Ministry estimates that the collapse has affected about 7,000 direct and indirect jobs at the bank and its related businesses. On Thursday, Ueno employees still in their uniforms burned their credit cards and cursed Peña outside the Labor Ministry, demanding severance pay and unpaid wages.

What happens to savers’ money

For the millions of people locked out of their accounts, the most urgent question is simple: when will they get their money back?

Congress rushed a law through on Wednesday to answer it. Under the law, a state guarantee fund must repay stranded depositors within five business days. Repayments were due to start on Thursday with small accounts of up to about $1,600, for customers who owe nothing to Ueno. The fund insures up to about $36,000 per customer, and the central bank says that will cover the full balances of an estimated 97 percent of clients.

The central bank has also begun a process to transfer Ueno’s deposits and recoverable assets to other banks, before liquidating what remains of the lender. In other words, healthy parts of the bank are being moved to safer hands, and the rest will be sold off.

Even so, trust has been badly damaged. Paraguay’s currency, the guaraní, fell nearly 4 percent against the US dollar on Thursday, bringing its losses for the week to nearly 7 percent, according to central bank exchange-rate data.

Protests in the streets

Peña’s resignation did little to calm the anger on the streets. Many protesters said his departure alone would change nothing — they want the impeachment process to finish, so that he loses the legal immunity that comes with the presidency, and they want their money back.

“Let the impeachment process take place and let him lose his immunity,” said Adolfo Villalba, one of the protesters on Thursday.

On Wednesday, thousands marched on Congress. “Santiago Peña and the Colorado Party have stolen all our savings,” said Luis Pineda, one of the protesters. The crowds shouted “We want your head, Peña!” and carried signs calling him “the enemy of savers” and pleading “Give us back our money.” Riot police fired pepper spray and rubber bullets to push them back.

At the national stadium that once bore Ueno’s name, the bank’s logo had already been scrubbed away. Across the capital, fresh graffiti called politicians thieves.

For many Paraguayans, the crisis is not only about one bank. It is about a system in which the ruling party, the regulators and the business elite sit too close together. Only Venezuela ranks worse than Paraguay in South America on Transparency International’s latest index of perceived corruption. “This is yet another assault on honest, hard-working citizens, people whose small savings are the fruit of years of labor,” said Belarmino Balbuena, one of the thousands who marched on Congress.

Who is Pedro Alliana?

The man expected to replace Peña is Vice President Pedro Alliana, 52, who was elected on the same ticket in 2023. Alliana is a senior figure in the Colorado Party. He previously served as president of the Chamber of Deputies, the lower house of Congress, and as governor of Ñeembucú, a department in southern Paraguay.

Alliana’s own position is not entirely clean. The Chamber of Deputies rejected an impeachment motion against him on Thursday, by 48 votes to 30 — short of the two-thirds majority required.

If he takes over, Alliana will serve out the remainder of Peña’s term, which ends in August 2028. Because the vacancy came in the final two years of the five-year term, no new election is required. Instead, Congress must choose a new vice president.

Why it matters beyond Paraguay

Paraguay is a small country, but the fall of its president matters for the region. The country had worked hard to build a reputation as a stable place for foreign investment, especially for money from neighbouring Brazil. That reputation is now damaged. The crisis has also shown how quickly a banking failure can become a political crisis when the people in charge of supervising the bank are linked to the people who own it.

There is also a warning in the story for the rest of Latin America, where digital banks are growing fast and reaching millions of people who never had a bank account before. Fast growth is not the same as safe banking. When a bank holds the salaries and pensions of half a country, the people watching over it must be truly independent — and the rules must be enforced before the money runs out, not after.

What happens next

Several things still need to happen. Congress must formally accept Peña’s resignation and swear in Alliana as president, and it must choose a new vice president. Opposition senators are still demanding a trial, arguing that letting Peña resign would preserve his eligibility to become a senator for life, with legal protections that could prevent his prosecution.

The criminal cases will continue regardless. Prosecutors have charged 27 people, and the courts will decide whether the lending at Ueno was a crime or simply bad banking. The fate of the frozen deposits will be the test that matters most to ordinary Paraguayans: the guarantee fund has promised to start repaying small accounts within five business days, and millions of people will be watching to see whether that promise is kept.

Frequently asked questions

Why did Paraguay’s president resign?

Santiago Peña resigned on 5 November 2026 after the collapse of Ueno Bank, a digital lender in which he had been a shareholder until March 2025. The bank’s failure froze the accounts of about 3 million customers, triggered mass protests, and cost him the support of his own party.

What happened to Ueno Bank?

Paraguay’s central bank took over Ueno on 3 November 2026 after finding that its capital had fallen to less than half of the legal minimum. Regulators found poorly documented loans to companies linked to the bank’s owners, and expenses wrongly counted as assets. The bank’s app, cards and transfers stopped working, and its branches closed.

Will savers get their money back?

A state guarantee fund must repay stranded depositors within five business days, starting with small accounts of up to about $1,600. The fund insures up to about $36,000 per customer, and the central bank says that will cover the full balances of about 97 percent of clients.

Who will replace Peña as president?

Vice President Pedro Alliana is expected to take over and serve out the rest of the term, which ends in August 2028. Congress must formally accept the resignation and choose a new vice president.

Has anyone been charged over the Ueno collapse?

Yes. Prosecutors have charged 27 bank officials and business associates with breach of trust and attempted fraud. Six executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale, were jailed pending trial, and two others were placed under house arrest.

How big was Ueno Bank?

Ueno had about 3 million customers in a country of 6.5 million people — more than 60 percent of Paraguay’s adults. It held roughly $800 million in public money, including state pension and health funds.

Sources

• Reuters, “Paraguay President Peña resigns under mounting pressure from bank collapse”, 5 November 2026: https://ksevradio.com/paraguay-president-pena-resigns-under-mounting-pressure-from-bank-collapse/
• Associated Press via NPR/WESA, “Paraguay’s president is impeached minutes after resigning following a bank collapse”, 5 November 2026: https://www.wesanews.org/national-international-news/2026-11-05/paraguays-president-is-impeached-minutes-after-resigning-following-a-bank-collapse
• Americas Society / Council of the Americas, “Paraguay’s President Resigns. Why, and What Comes Next?”, 5 November 2026: https://www.as-coa.org/articles/paraguays-president-resigns-why-and-what-comes-next
• Reuters via Devdiscourse, “Paraguay President Peña resigns under mounting pressure from bank collapse”, 5 November 2026: https://www.devdiscourse.com/article/international/4002223-paraguay-president-pea-resigns-under-mounting-pressure-from-bank-collapse

This article is for general information and education only. It is not legal or financial advice.