Paraguay in crisis – President Peña resigns due to banking scandal
Scandal surrounding the Ueno digital bank plunges the country into a political crisis
Quick Look
- Paraguay's President Santiago Peña has resigned in the wake of a serious banking crisis surrounding the digital bank Ueno.
- The central bank initiated a resolution process after the capital ratio fell below 50 percent of the minimum required value.
- Around 2.8 million customers were affected, and there were street protests in Asunción.
AI-generated summary
Why It Matters
The digital bank Ueno fell into crisis after its equity ratio fell below 50 percent of the required minimum value. The central bank initiated a resolution process. President Peña held a stake in the bank's parent company until March 2025 and was criticized for possible conflicts of interest. The opposition had requested impeachment proceedings.
Paraguay's President Santiago Peña has resigned amid a severe banking crisis. He said in a televised speech that he was doing this in the interest of his country's stability. A scandal surrounding the digital bank Ueno has plunged the South American country into a political crisis.
The central bank initiated resolution proceedings against Ueno after the financial institution's equity ratio fell below 50 percent of the required minimum value. As a result, customers were temporarily no longer able to access their accounts.
“Today there is only one priority: the peace of Paraguayans who have entrusted their savings to our financial system,” Peña said in his address. His greatest wish is that the payment of the funds is guaranteed. “I would also like to apologize to the Paraguayan people if at any moment I made a mistake.”
Peña was criticized because of his previous business ties to Ueno. He held a stake in the bank's parent company until March 2025. He had previously rejected allegations of possible conflicts of interest. The opposition had requested ongoing impeachment proceedings against Peña.
Central bank chief Carvallo also had to resign because he was accused of a conflict of interest due to his previous managerial position at the digital bank.
Ueno Bank said it had 2.8 million customers in the first quarter of this year, around 60 percent of the country's adult population. It is one of the largest banks in Paraguay. Pension payments were also processed through the bank's currently frozen accounts. There were street protests in the capital Asunción.
What to Watch
AI outlook — possibilities, not facts
The payout of customer funds is guaranteed and processed by the central bank.
Likely · Within days
The impeachment proceedings against Peña will continue or will be rendered moot by his resignation.
Possible · Within weeks
Open Questions
- Is the payout of customer funds fully guaranteed?
- How will the impeachment proceedings against Peña be followed up?
- Who will succeed Central Bank Chairman Carvallo?
