Paraguayans woke up this Saturday, November 7, with a new head of state. This is Pedro Alliana, who took office after the right-wing Santiago Peña was removed by the Senate in a political trial – and subsequently placed under house arrest – for his alleged involvement in the collapse of Ueno Bank. The banking crisis initially left about three million people, half the country's population, without access to their money.

First modification: 11/07/2026 - 16:30 Last modification: 11/07/2026 - 16:48

Pedro Alliana, the Colorado leader who becomes President of Paraguay in the middle of the banking crisis.

Faced with one of the worst political, economic and social crises in the Latin American country after the collapse of Ueno Bank, Alliana promises to compensate savers, prioritize the most vulnerable sectors and concentrate its management on the country's internal problems. But also, he must govern under the influence of Chartism and in the midst of strong political and financial uncertainty.

Alliana assumed leadership of the Executive on a night in which dozens of people demonstrated in front of the house of former Paraguayan President Santiago Peña after authorities placed him under house arrest following his dismissal amid the political and financial crisis triggered by the collapse of Ueno Bank.

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After the anger of the population reached the vicinity of Peña's home, the former president was transferred, amidst a strong security device, to the Escort Regiment in Asunción.

From Colorado leader to president

Pedro Alliana, 52, assumes the Presidency of Paraguay after Congress dismissed Santiago Peña on Friday, November 6, through a political trial triggered by the Ueno Bank crisis. Until then vice president, he will complete the current mandate of the Executive until August 2028.

A veteran leader of the National Republican Association (ANR), known as the Colorado Party, Alliana built his political career in the department of Ñeembucú, where he was born and served as governor before occupying a seat in the Chamber of Deputies for a decade.

He also presided over the Colorado Party for seven years and consolidated his political rise alongside former President Horacio Cartes, one of the most influential figures in Paraguayan politics.

His arrival to power occurred earlier than expected. Alliana aspired to compete for the Presidency in 2028, but suspended her pre-candidacy in the midst of the financial crisis and Peña's growing political isolation.

Although he initially remained loyal to the president, his statements about not assuming responsibility for other people's mistakes were interpreted as distancing himself from the then president.

What will you do about the Ueno Bank crisis?

The main urgency of his Government will be to respond to the consequences of the closure of Ueno Bank, ordered by the Central Bank of Paraguay (BCP), which affected some 2.94 million clients, including individuals and institutions, including the state Social Security Institute (IPS).

"I don't want any lukewarm person in charge of this mission. I want results"

In his first message as president, Alliana promised that those affected by the "financial disaster" will be "fully compensated" and ordered immediate measures to be taken to compensate savers, with priority for the least favored sectors. "I don't want anyone lukewarm in charge of this mission. I want results," he warned, demanding speed in the institutional response.

The crisis also caused the departure of the president of the Central Bank, Carlos Carvallo, and the dismissal of Peña, questioned for his previous business ties with the group that owns the financial entity. The scandal sparked protests in Asunción and put oversight of the financial system and the relationship between private interests and public resources under scrutiny.

For now, Alliana has announced its compensation commitment. The ability of his Administration to fulfill that promise will be one of the first tests of his administration.

So far, 1.2 million people have already received the return of their funds, as reported this Saturday, November 7, by the Central Bank. The rest of the disbursements, which are expected to be progressive, still need to be defined, according to the interim head of the issuing entity, Pedro Acosta.

What is Ueno Bank and how did it trigger the political crisis in Paraguay?

Launched in 2021, ueno is a Paraguayan digital bank that experienced rapid growth to reach nearly three million clients in a country of 6.5 million inhabitants. The entity, compared to platforms such as Nubank, Revolut or Monzo, managed around $850 million in public funds, including resources from state institutions and organizations linked to the pension system. However, its expansion came under suspicion due to alleged excessive loans to companies related to its main shareholder, the Vázquez Group.

The crisis broke out when the Central Bank of Paraguay detected non-compliance with the minimum solvency requirements and ordered the entity to be subjected to a resolution process, which temporarily left millions of clients without access to their accounts. Among those affected are pensioners and public institutions. The authorities announced the transfer of deposits to other financial entities and approved measures to expedite compensation to savers.

The scandal acquired political dimensions due to former president Santiago Peña's former business ties with the Vázquez Group, a stake that he claimed to have sold in March 2025. Although ueno maintains that Peña was never a shareholder or direct investor in the bank, opposition legislators denounced possible conflicts of interest and questioned the management of public funds. The Prosecutor's Office included the former president among the people investigated and issued arrest warrants against eight executives of the entity.

The actions of regulatory bodies also came under scrutiny, especially since the then president of the Central Bank, Carlos Carvallo, had previously headed ueno. Carvallo resigned on Tuesday, while the institution defended that it had inhibited itself from participating in decisions related to the bank. Doubts about financial supervision, added to customer protests and political pressure, precipitated Peña's dismissal and opened a new stage of institutional uncertainty.

Despite the magnitude of the scandal, authorities maintain that the problem is limited to one and does not represent a structural weakness of the Paraguayan banking system. However, the entity also accumulated some 510 million dollars in international financing, including a bond issue of 350 million on Wall Street, so the crisis could affect investor confidence and the financial reputation of Paraguay, which had managed to position itself as one of the most stable economies in South America.

A continuity government under the influence of Cartes

Despite the change of president, a break with the political course of the Colorado Party is not necessarily expected. Alliana maintains close ties with Cartes, which points to continuity of the main lines of Government, although with a scenario of greater dependence on the party structure.

Analyst Mariano Machado, from Verisk Maplecroft, considers that an Alliana Presidency implies political continuity, Cartes' influence and a weak mandate.

He also anticipates that an orthodox macroeconomic policy will be maintained, although with greater pressure to allocate resources to political clientelism in view of the 2028 elections.

In foreign policy, Alliana has defended ties with the United States and supported regional cooperation against organized crime, as well as Paraguay's diplomatic support for Taiwan and Israel.

Health and internal problems, among your priorities

In his first hours in office, Alliana also sought to mark differences with his predecessor by announcing that he will concentrate his management on Paraguay's internal problems.

"I am going to be a president who takes care of Paraguay inside," he stated, asking his ministers to limit trips abroad to situations that cannot be postponed.

His first day of work included a meeting with the Minister of Health, Isaías Fretes, to whom he conveyed the need to address the emergencies of the health system, especially the supply of medicines and medical care.

The sector carries a debt of around $1 billion with suppliers of medicines, supplies and services, according to data released by the Ministry of Health in April.

With the mandate scheduled until August 2028, Alliana must simultaneously face the recovery of financial confidence, social demands and tensions within the ruling party.

His main challenge will be to demonstrate that he can stabilize the country and respond to those affected by Ueno Bank without the crisis ending up further weakening a government that comes to power under extraordinary circumstances.

With Reuters, EFE and local media

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