Paraguay underwent a significant political transition after President Santiago Peña was impeached and removed from office by the Senate. The legislative action followed a severe banking crisis involving the collapse of Ueno Bank, which left nearly half the country unable to access their financial accounts.
Impeachment and Political Fallout
The Senate voted overwhelmingly to remove Peña, finding him guilty of poor performance in office due to his previous financial ties to Grupo Vazquez, the entity that previously controlled Ueno Bank. Following the vote, authorities placed the former president under house arrest, stripping him of his political immunity as prosecutors prepared to question him on allegations of breach of trust, influence peddling, and misappropriation of funds.
Former Vice President Pedro Alliana was swiftly sworn in as the new president, with a mandate to serve until the conclusion of the term in 2028. Alliana immediately addressed the public, pledging that the roughly three million affected depositors including pensioners and everyday families would be fully compensated. Opposition lawmakers had also attempted to initiate impeachment proceedings against Alliana, but those efforts failed to secure the necessary congressional support.
Public Unrest and Investigations
The collapse of the financial institution triggered massive street protests in Asuncion and other cities, with citizens demanding the return of their savings and accountability for the crisis. Demonstrations persisted for multiple nights before police dispersed crowds using tear gas and water cannons.
The scandal prompted widespread institutional fallout, resulting in the departures of Central Bank President Carlos Carvallo and Interior Minister Enrique Riera, alongside the arrests of eight Ueno executives and police raids on locations connected to Grupo Vazquez. The crisis also extended beyond national borders, impacting approximately 1,000 employees of the technology firm ITTI part of the Grupo Vazquez network who faced temporary unpaid suspensions in neighboring Argentina. Domestic sports were also affected, as the bank held sponsorship ties with numerous top-division football clubs as well as the national team.
Financial Relief Efforts
Amid public pressure, authorities initiated the distribution of advance payments to impacted clients through the Central Bank’s Deposit Guarantee Fund. The initial phase focused on releasing funds up to approximately $1,600 for depositors without existing loans who maintain alternative accounts at other financial institutions, with subsequent phases of relief scheduled for progressive rollout.