Credit, AFP/Bloomberg via Getty Images
The liquidation of the Ueno bank triggered a strong political crisis in Paraguay, with the resignation of the president of the country's Central Bank and later, the impeachment and arrest of the now former president Santiago Peña.
Peña was a shareholder in Grupo Vázquez, controlling bank Ueno, until March 2025. The then president of the Paraguayan Central Bank, Carlos Carvallo Spalding, had also commanded Ueno before taking public office.
The banking crisis, of a bank with strong political ties and involving a significant amount of public resources, including pensions, led to comparisons between the Ueno crisis and that of the Master bank, in Brazil.
Experts interviewed by BBC News Brasil point out that, in fact, there are many points of contact between the cases, but also relevant differences, such as the scale of Ueno in the Paraguayan economy, and the bank's direct proximity to the country's president – who was already politically weakened by internal crises within his party, Colorado, which ended up precipitating his rapid fall.
"The similarity between the Master and Ueno cases is striking. In both cases there was significant exposure of public resources, including social security, very rapid growth supported by fragile assets and close relationships with the political world", says Thiago Amâncio, associate director of the geopolitical risks team at the consultancy Control Risks.
"But the fundamental difference is the size of Ueno in the Paraguayan system, since almost half of the population has a bank account. It is a completely different scale to that of Master, which if it had been of an equivalent size would have caused a huge financial crisis here, not just a political one."
Fast growth
Ueno emerged from the acquisition in 2021 of the former Financiera El Comercio by Grupo Vázquez. The Ueno brand was launched in February 2022. In November of the following year, the institution received authorization from the Central Bank of Paraguay (BCP) to operate as a bank. In 2024, it incorporated Visión Banco, expanding its client portfolio and operations.
Thus, in just over three years, the bank became one of the main ones in Paraguay and, according to data from the institution itself, it had 3 million customers, equivalent to 60% of the country's adult population.
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In the case of Master, Daniel Vorcaro joined the then Banco Máxima in 2017. Two years later, the Central Bank of Brazil authorized the transfer of control of the institution to the banker and, in 2021, the bank was renamed Banco Master.
Credit, Master Bank
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The banks' strategies to win customers, however, were different: while Ueno invested in digital account opening, discounts and the return of part of the value of purchases, Master attracted investors with CDBs (Bank Deposit Certificates) that offered remuneration well above the market average.
"Ueno was a retail bank, which grew by expanding its customer base, so it was aggressive in credit cards and opening accounts, while Master was more concerned with buying assets, raising money and using this money to leverage assets with low liquidity", observes Alexandre Jorge Chaia, professor in the disciplines of financial risk management and banking products at Insper.
"Both grew a lot, but it was at very different paces. Ueno Bank, in three years, went from an insignificant bank to one of the main banks in the country. In the case of Master, there were six years of growth, but from the point of view of relevance, it was never great."
Exposure to public resources and pensions
In Paraguay, Ueno managed around US$850 million in public resources, including funds from the Social Security Institute (IPS), responsible for paying retirements, pensions and other benefits.
In Brazil, state and municipal pension schemes invested around R$1.8 billion in bonds issued by Master, according to data from the Ministry of Social Security.
Relations with the political world
In Paraguay, the Central Bank pointed out loans considered excessive to companies linked to Ueno's controlling group, Vázquez, which had Santiago Peña as a shareholder until last year and the former president of the Paraguayan Central Bank as an executive.
In Brazil, Daniel Vorcaro, from Master, built an extensive network of contacts with politicians, members of the government and judicial authorities.
Among those affected by the scandal, senator Ciro Nogueira (PP-PI), former chief minister of the Civil House of Jair Bolsonaro (PL), became the target of search and seizure as part of the Compliance Zero operation.
Flávio Bolsonaro, the PL's defeated presidential candidate, found himself embroiled in the bank crisis, after receiving funds from Vorcaro to finance the film Dark Horse, a biopic about his father's career.
The scandal also involved several ministers of the Federal Supreme Court (STF), such as Dias Toffoli, Alexandre de Moraes, André Mendonça, Kassio Nunes Marques and Luiz Fux.
Credit, Getty Images
BCs under suspicion
Luis Miguel Santacreu, bank analyst at risk agency Austin Ratings also points out a fourth similarity between the cases: the close relationships revealed between private financial institutions and the central banks of the two countries, responsible for supervising the banking system.
He recalls that Master co-opted directors from the Central Bank to act in favor of the bank, such as Paulo Sérgio Neves de Souza, former director of supervision at the BC, and Belline Santana, former head of the Department of Banking Supervision. According to the investigations, Santana and Souza provided a type of consultancy for Vorcaro, providing strategic information from within the BC and advising on the Master's decisions.
In the case of Ueno, the appointment of Carlos Carvallo to the Paraguayan Central Bank raises suspicions that the monetary authority has been lax in its supervision, even in the face of evidence that the bank has already been facing liquidity problems since at least the month of June.
Prisons
In Brazil, Daniel Vorcaro, controller of Banco Master, was preventively arrested in November 2025. After being released eleven days later, he was detained again in March 2026, as part of investigations into suspected financial fraud.
The arrest occurred after the attempted sale of Master to Banco de Brasília (BRB), a public institution controlled by the government of the Federal District, was blocked by the Central Bank, amid questions about the operation.
In Paraguay, the judge responsible for the Ueno case ordered on Thursday (5/11) the preventive detention of six former directors and executives of the bank, including Juan Manuel Gustale, former president of the institution, and Federico Miguel Vázquez Villasanti, founder of the Vázquez Group, the bank's controller. Two other former directors received house arrest.
Those investigated face accusations that include abuse of trust, attempted fraud and improper conduct in a crisis situation. The accusations will still be examined by the courts.
And on Friday, hours after being impeached, Peña was detained at home, after the Public Ministry issued an order for house arrest amid investigations into his involvement in the Ueno case.
Scale difference
Despite the similarities, the weight of each institution in its financial system is an important difference in both cases.
Ueno accumulated around US$3.75 billion in assets and concentrated approximately 9.1% of the Paraguayan banking system's deposits. Master, in turn, had R$86.8 billion in assets, but represented around 0.55% of the Brazilian financial system's funding.
The difference also appears in the dimension of the impact of the crisis. With the Paraguayan Central Bank's decision to begin the institution's resolution process on November 3, the bank's deposits and operations were frozen.
Customers were left without access to the accounts, cards and money they kept at the institution. The measure caused queues at agencies and difficulties in paying day-to-day expenses, such as rent, shopping and transport, leading to protests in the streets.
"In the case of Ueno, it is a bank that had a much greater penetration in the Paraguayan economy", notes Santacreu. "It was a bank that had won public sympathy, because it had a very accessible language, as if it were a Nubank here in Brazil."
Master reached the general public mainly through investment in CDBs. For this reason, says the Austin Ratings analyst, its liquidation never posed a risk to the Brazilian banking system and mainly penalized the Credit Guarantee Fund (FGC), which had to disburse more than R$40 billion to compensate injured customers.
Why did the Ueno case lead to the downfall of Santiago Peña?
But the difference in the scale of the crises is not enough to explain why Paraguayan president Santiago Peña was removed from office, and the Master crisis in Brazil did not prevent Lula from being re-elected last month — which has been cited by Bolsonarists on social media.
"A fundamental difference is Ueno's proximity to the president specifically, not just to high-ranking members of politics, as Peña was a shareholder in Ueno's controlling group and the government is being questioned for decisions that would have favored the bank", observes Thiago Amâncio, from Control Risks.
"In Brazil, Master's political relations are important and very broad, but they are more diffuse and involve other authorities, in addition to the fact that there was no formal connection between the president [Lula] and the bank – which is one of the reasons for Peña's downfall."
Credit, Reuters
Junior Ivan Bourscheid, professor of Political Science and Sociology at the Federal University of Latin American Integration (Unila), also notes that Peña was facing a situation of wear and tear within his party, Colorado, which had been going on since before the banking crisis.
The right-wing Colorado Party has governed Paraguay almost uninterruptedly since 1947. The only exception was the government of Fernando Lugo, from the left-wing Frente Guasú coalition, who governed between 2008 and 2012, whose mandate was interrupted by impeachment.
“When Peña ran his campaign and at the beginning of the government, he managed to form a majority within the Colorado party, which has many internal factions,” notes Bourscheid. "But over time, various groups within the party felt relegated by the president."
Furthermore, the opposition had already been making accusations of corruption and mismanagement of public resources by the government, but without managing to obtain a majority so that the accusations could lead to more serious developments, such as impeachment.
The last straw for Peña's maintenance in power, however, was the loss of support from Horacio Cartes, the most powerful political figure in Paraguay, who controls the main faction of the Colorado Party, Honor Colorado, and who was Peña's main political godfather.
"The president was sacrificed by Cartes to try to prevent the scandal from contaminating the party before the 2028 election", considers Amâncio, from Control Risks.
Amâcio notes that Honor Colorado had already been in an internal crisis since October, when Cartes tried to withdraw support for the 2028 presidential candidacy of Pedro Alliana — who assumed the presidency after Peña's impeachment — and replace him with another name, Juan Carlos Baruja.
"This provoked a strong reaction and 15 Colorado governors declared unanimous support for Alliana, as well as important deputies, and the vice president stated that he would maintain his candidacy even if he needed to contest outside the traditional structure of Honor Colorado. Peña also positioned himself alongside Alliana", recalls Amâncio.
Furthermore, in this year's municipal elections, the Colorado party lost Asunción and Ciudad del Este, the country's two main cities, which was politically very symbolic, he notes.
"Then the Ueno crisis arrives, with a party under pressure in the big cities and Honor Colorado escaping Cartes' control. Keeping Peña in office in the face of a scandal that involved millions of account holders and social security resources would be a very high risk for 2028", says Amâncio.
With information from Iara Diniz, from BBC News Brasil in São Paulo
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