Paraguay resumes Pena impeachment proceedings as financial crisis deepens
Senate moves to remove conservative economist after bank collapse crisis
Quick Look
Paraguay's Senate has resumed impeachment proceedings against President Santiago Pena, who resigned amid links to the country's worst financial crisis in decades following the collapse of Ueno Bank, which held $850 million in public funds and left over half the population without access to their accounts.
AI-generated summary
Why It Matters
Paraguay's central bank intervened at Ueno Bank earlier this week citing breaches of minimum solvency requirements. President Pena previously held a stake in Ueno's parent company, Grupo Vazquez, until last year when he claims he sold his shares. Lawmakers have accused him of a conflict of interest and questioned whether authorities failed to act on warnings about the lender's financial position.
Lawmakers in Paraguay have resumed impeachment proceedings against President Santiago Pena, a day after he resigned amid links to the country's worst financial crisis in decades.
The Senate convened a rare session on Friday to consider Pena's political future, opting to move forward with efforts to remove the conservative economist from office.
Politicians formally filed impeachment charges against the president on Thursday, despite his resignation. Pena, who was elected in 2023, has requested a 72-hour extension to prepare his defence before the Senate.
The proceedings follow a vote in Paraguay's lower house of Congress, where lawmakers overwhelmingly approved impeachment charges against Pena in a 78-0 vote.
The political turmoil surrounding the country's president follows Paraguay's central bank's intervention earlier this week at Ueno Bank, one of the country's fastest-growing digital lenders, citing breaches of minimum solvency requirements.
Pena previously held a stake in Ueno's parent company, Grupo Vazquez, until last year, when he claims he sold his shares. Paraguayan lawmakers have accused the president of a conflict of interest and questioned whether authorities failed to act on warnings about the lender's financial position.
The collapse of Ueno, which held $850m in public funds, has left more than half of Paraguay's population without access to their accounts, drawing intense scrutiny over the government's relationship with the bank and financial regulators' effectiveness.
"My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfil its purpose, and that public funds — as well as the resources that belong to all Paraguayans — be protected," Pena said in a Thursday video address where he apologised for failing to prevent the crisis.
The crisis has also prompted the resignation of Paraguay's central bank chief, Carlos Carvallo, and arrest warrants for eight Ueno executives, who later turned themselves in.
Paraguay's attorney general has ordered three criminal investigations into the bank's collapse, including its regulatory oversight and the placement of public funds in the institution.
If Pena is convicted in an impeachment trial, he would lose the lifetime Senate seat and associated legal protections ordinarily granted to former Paraguayan presidents.
What to Watch
AI outlook — possibilities, not facts
The Senate will proceed with the impeachment trial against Pena after his requested 72-hour extension.
Very likely · Within days
Criminal investigations into Ueno Bank's collapse will continue under the attorney general's office.
Very likely · Within weeks
Open Questions
- Will the Senate convict Pena in the impeachment trial?
- Will the deposit guarantee fund cover the $850 million in public funds?
- What were the specific warnings about Ueno Bank's financial position and why were they not acted upon?
