Paraguay in turmoil as president resigns over bank crisis

Paraguayan President Santiago Peña has resigned amid mounting political pressure following the collapse of Ueno Bank, a major digital lender with which he previously had business ties.

Peña announced his resignation on Thursday, November 5, 2026, as protests spread across the South American country over the banking crisis, which has left approximately three million customers unable to access their accounts.

The crisis began after Paraguay’s Central Bank took control of Ueno Bank on Tuesday, November 3, following findings that the lender had fallen below the minimum capital requirements.

The intervention forced the suspension of the bank’s services, leaving millions of customers, including pensioners and other beneficiaries of government payments, unable to access their savings.

According to reports by Reuters and the Associated Press, Ueno Bank manages about $850 million in public funds, including money belonging to state pension and healthcare institutions.

Peña’s previous business relationship with the bank’s parent company, Grupo Vázquez, also came under scrutiny as the crisis deepened. The Paraguayan president was previously a shareholder in the group but reportedly sold his stake in March 2025.

Opposition lawmakers accused him of conflicts of interest, alleged misuse of pension funds and institutional interference in the handling of the bank’s affairs.

The allegations intensified calls for his impeachment, with protesters demanding accountability and the immediate return of depositors’ money.

In his resignation announcement, Peña said his decision was guided by the need to preserve national stability, social peace and democratic institutions.

He also expressed concern about the affected depositors, stressing the importance of ensuring that their funds were recovered and public resources protected.

The banking crisis has also triggered other high-profile developments, including the resignation of Central Bank President Carlos Carvallo, who stepped down at Peña’s request.

Meanwhile, Paraguayan authorities have detained eight senior executives of Ueno Bank as part of investigations into the lender’s collapse. Prosecutors are also investigating alleged financial misconduct involving bank officials and business associates.

Despite Peña’s resignation, the country’s political crisis remains unresolved. Paraguay’s lower house of Congress approved his impeachment on Thursday, while rejecting a similar motion against Vice-President Pedro Alliana, who is next in line to succeed him.

The impeachment decision and Peña’s resignation must still go through the required Senate procedures, potentially delaying the formal transfer of power to Alliana.

The development has raised concerns about public confidence in Paraguay’s financial institutions and the country’s reputation as a destination for foreign investment.