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The president of Paraguay, Santiago Peña, announced his resignation this Thursday (5/11), amid the crisis caused by the collapse of Ueno Bank, which shook the country's financial system and triggered a political crisis.
In a video published on social media, Peña apologized to the population and said he decided to resign "thinking about the stability of our country, social peace and the need to preserve our democratic institutions."
"I am convinced that no position can be above the well-being of Paraguay. I also want to apologize to the people. If at any point I failed, it was never my intention to disappoint the trust they placed in me," he stated.
With his resignation, Peña avoided being the target of impeachment proceedings. The departure of the Paraguayan president, one of the exponents of the new right in Latin America, comes after the governing Colorado Party, led by former president Horacio Cartes, announced support for the impeachment process.
Peña is accused by the opposition of conflict of interest, misuse of public funds and covering up irregularities related to the bank.
The case originates from the collapse of an institution that grew rapidly and was presented as one of the great success stories of the Paraguayan financial system. To understand how the bank got into this situation — and why the crisis hit the government — it is necessary to go back a few years.
When Ueno Bank celebrated its transformation into a bank, at the end of 2023, its directors were proud of the institution's numbers.
They stated that the bank, which was relatively new, already had more than 500 thousand customers and had managed to include around 140 thousand people in the financial system who previously did not have a bank account.
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It was a significant achievement for an institution that, just two years before, was a small financial company specializing in technology.
"This is just beginning," declared Juan Manuel Gustale, then president of Ueno Bank, during celebrations at the Ueno SND Arena, in Asunción.
Less than three years after that declaration, history took an unexpected turn.
On Tuesday (3/11), the Central Bank of Paraguay (BCP) announced the beginning of a process to dissolve Ueno Bank, after finding that its solvency ratio — an indicator that measures the bank's ability to absorb losses — had fallen to less than half the minimum required.
The news surprised many people. A few weeks before the intervention, Ueno Bank was still presented as one of the great success stories of the Paraguayan financial system.
The situation shook not only the country's financial sector, but also the highest levels of political power. Both President Santiago Peña and the President of the Central Bank, Carlos Carvallo Spalding, began to be questioned for old ties with the bank and its business group.
'Paraguay Master Case'
The case began to be compared, in Brazil, to that of Banco Master, liquidated by the Brazilian Central Bank in November 2025 and which led to the arrest of banker Daniel Vorcaro.
The two institutions had accelerated growth, raised resources from pension funds and faced questions about financial operations and relations with public authorities.
The crisis at the Paraguayan bank gained new proportions on Wednesday (4/11), when opposition parliamentarians intensified attempts to remove Peña, whom they blame for the collapse of Ueno Bank, which left millions of customers without access to their accounts.
Opponents accuse the president of conflict of interest, of allowing the misuse of pension funds and of covering up irregularities in the handling of the banking crisis.
This Thursday (5/11), the Chamber of Deputies would analyze the request for a complaint against Peña and an impeachment process would begin for his alleged responsibility in the case. For the process to advance to the Senate, two-thirds of the votes of the deputies present would be required.
In a setback for the current president, Horacio Cartes, former president of Paraguay and leader of the ruling Colorado Party, announced that the party would support impeachment.
"We will not be on the side of the diversion of public and private resources and retirees' funds. We need to think about the people and values we defend in the Colorado Party. We support the impeachment of the President of the Republic, Santiago Peña, to reestablish the country's institutionality," he said in a statement.
Peña was elected in April 2023 as president of Paraguay. Until 2015, he was an outsider in national politics. An economist by training, he was part of the Central Bank of Paraguay for a decade, first in the area of Economic Research and then as director.
Right-wing, he is aligned with President Donald Trump and has already praised him publicly.
In September 2026, Ueno Bank claimed to have more than 3 million customers in a country of 6.5 million inhabitants — equivalent to almost two in three Paraguayans.
The institution also claimed to process more than 3 million transactions per day.
Its dissolution now raises questions about how a bank that grew so quickly in such a short time got into this situation.
Orkun Saka, professor and researcher of financial economics at City St George's, University of London, says that the Ueno Bank case goes far beyond the mismanagement of a financial institution.
"Let's be clear about what happened. A bank belonging to a single business conglomerate ended up concentrating the savings of the majority of adults in the country, in addition to hundreds of millions of dollars in pension funds," he told BBC Mundo.
Saka states that the Central Bank had already warned, months before the collapse, about "excessive loans granted by the bank to companies linked to its own controllers".
"Even so, public resources continued to arrive. This is not simply the story of a poorly managed bank. It is a system in which the bank, the regulatory body and the Presidency were so closely linked that none of them seemed able to impose limits on the others", he adds.
BBC Mundo contacted the Presidency of Paraguay to ask for a position on the case, but had not received a response until the publication of this report.
1. The origins of Ueno Bank
The origins of Ueno date back to 1976, with the founding of Financeira El Comercio.
After 45 years of activity, the finance company was acquired by Grupo Vázquez, in April 2021. The operation received authorization from the Central Bank of Paraguay (BCP) in September of that year.
Two years later, the institution obtained authorization to transform into Ueno Bank and join the Paraguayan banking system.
The newly created bank was consolidated in 2024, with the incorporation of Visión Banco. The operation added more than 1 million customers to its portfolio, a wide network of branches and one of the largest deposit bases in the Paraguayan financial system.
Credit, Reuters
Ueno Bank is still majority-controlled by the Vázquez Group, one of the largest business and industrial conglomerates in Paraguay.
The group is chaired by businessman Federico Miguel Vázquez Villasanti, who presented himself to judicial authorities on Tuesday, after the Prosecutor's Office ordered his arrest.
Among those detained are also Juan Manuel Gustale, president of Ueno Bank; Julio Rey Fernández, vice president; Mariana Torres Rubiani, main director; and board members Diego Duarte Schussmuller and Alejandro Gómez Abente.
Also arrested were Diana Leticia Mongelós González, second vice-president of the bank, and Miguel Ángel Almada Frutos, an executive linked to Ueno Seguros and the Vázquez Group.
2. Ties with the government
Many critics have drawn attention to the links between Ueno Bank and sectors of political power, especially President Santiago Peña's relationship with companies linked to the financial institution's controlling group.
Peña appeared as a shareholder in Ueno Holding, which brings together companies such as Ueno Seguros, itti and Grupo Vázquez, the main shareholder of Ueno Bank.
At the beginning of 2025, the Paraguayan president stated that he had ceased to be a shareholder in the holding company and denied any connection with the bank.
"I was an investor, I'm an economist, I specialized in Finance and I made an investment six years ago in the company Credi Centro, which later became Ueno Holding. It was never the Ueno bank. I have no connection with the Ueno bank", he declared to a group of journalists in April 2025.
Many also question the role of Carlos Carvallo Spalding, who submitted his resignation as president of the Central Bank of Paraguay amid the controversy.
Before taking office, in August 2023, Carvallo had presided over Financeira Ueno.
Economist Orkun Saka warns that this type of link can seriously compromise the credibility of a country's institutions, even when there is no proof of irregularities.
"Regulation depends on society's trust in the impartiality of those who are responsible for monitoring. When the president of the Central Bank has already directed the bank that he must now supervise and the president of the country was a partner of the institution's owners, this trust is broken. In this context, even if the decisions were technically correct, it will be difficult to convince people of this."
Saka adds that loss of confidence can be one of the most serious and long-lasting consequences of a financial crisis like this.
3. Rapid transformation
The process of transforming Ueno into a bank was completed in November 2023, when it received authorization from the Central Bank of Paraguay (BCP), then chaired by Carlos Carvallo Spalding.
The approval occurred just three months after Carvallo took command of the organization and Santiago Peña became President of the country.
The relationship of trust between the two was evident on different occasions. One of them was during Carvallo's inauguration ceremony, when the then Minister of Economy, Carlos Fernández Valdovinos, publicly praised him and stated that he "is not only a good person and a good professional, but, above all, a great friend".
"Neither I nor President Peña could think of better hands to take command of the BCP from now on and do everything we want and must do for all Paraguayans in these five years," he added.
4. Transfer of public funds
Shortly after entering the banking market, Ueno Bank began taking deposits from public bodies.
When it was intervened, the bank managed around US$850 million in public resources. Among them were funds from the Social Security Institute (IPS), including amounts intended for retirement, pensions and other social benefits.
For the opposition, the bank's links with public authorities need to be investigated further.
Opposition senator Rafael Filizzola classified the case as "the biggest fraud of the democratic era carried out from political power".
"It is a bank created from political power to use public money in private businesses linked to political power, with the President of the Republic at its head," he said on radio 1020 AM.
Filizzola also stated that the amount involved in the case could reach "something around US$3 billion, from what we know."
Meanwhile, Ueno Bank customers are following the case with concern. Some have taken to the streets to protest, while awaiting information on when and how much they will be able to recover from their savings.
The Deposit Guarantee Fund covers up to 228.3 million guaranis (around US$38,000) per account holder.
Authorities stated that the first payment, of up to 121.7 million guaranis, has already started to be processed. But customers with deposits above this amount are still waiting to know when and how they will be able to get the rest of their money back.
Saka warns that the consequences of the crisis could extend far beyond the next few weeks.
"The real proof is not in what will happen in the next few days, but in how the crisis will be managed in the coming years", he states.
"Whether the measures adopted will serve to protect savers and taxpayers or whether they will end up benefiting, once again, those who have connections with power."
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