Banking crisis: Paraguay's President Peña resigns after bank collapse

Asunción. Paraguayan President Santiago Peña resigned on Thursday amid mounting pressure following the collapse of digital bank Ueno. “I do this with a view to the stability of our country, social peace and the need to preserve our democratic institutions,” he said in a video recording. Vice President Pedro Alliana is to take over the official duties.

Peña is an ally of US President Donald Trump. He left office after the opposition in Congress called a special session to begin impeachment proceedings and protesters called for his resignation.

Peña lost the support of members of his conservative Colorado Party on Thursday. MPs accused him of conflicts of interest, misappropriation of pension funds and institutional cover-up in connection with the collapse of Ueno.

The economist, who has been in office since 2023, was a shareholder in Grupo Vazquez, which controls Ueno, until March last year. The financial institution quickly grew from a niche provider in the financial technology (fintech) industry into a medium-sized bank. The institute managed almost $850 million in public money.

“My greatest wish is that the return of these funds is guaranteed, that the Deposit Guarantee Fund fulfills its purpose and that public funds – as well as the resources that belong to all Paraguayans – are protected,” Peña said in his address.

Paraguay's central bank intervened in Ueno after detecting a violation of minimum solvency requirements. This triggered a crisis that left around three million of the company's customers in the country of 6.5 million people unable to access their accounts. The turmoil led to the resignation of the central bank chief on Tuesday and the arrest of eight Ueno executives. Ueno has not commented publicly on the case.