Paraguay President Peña Offers Resignation in Bank Crisis

Paraguay president Santiago Peña offered his resignation on Thursday after the collapse of digital lender ueno froze the accounts of about three million customers, but the resignation never took effect and a Senate impeachment trial will now decide whether he stays in office.

Peña announced the decision in a video posted on X, hours after opposition lawmakers moved to impeach him and after his own Colorado Party turned against him. Congress called a joint session to accept the resignation, but the session ended without a quorum after Colorado senators said they would reject it and insist on a trial. Peña remains in office.

Hours later, Peña said on X that he would appear before the Senate to present his defence. He said no office could be placed above the well-being of Paraguay, and urged a quick solution for savers left unable to reach their money. "Clarifying the facts and resolving the payments are obligations that must advance at the same time," he said.

The Senate opened the trial on Thursday night. Deputies acting as prosecutors presented the charges, and Peña was summoned to present his defence on Friday at 10 a.m. The trial could conclude the same day, according to Senate president Basilio Núñez. Removal requires the votes of 30 of the 45 senators.

How the ueno collapse unfolded

Paraguay's central bank opened a resolution procedure against ueno on Nov. 3, after finding that its solvency ratio had fallen below half of the minimum required. The review also found problems in asset quality and in the documentation of some operations, and found that the bank had lent to companies in its own group above permitted limits.

ueno grew from a niche fintech into a mid-sized bank after winning its banking licence, and it administered roughly $850 million in public funds, including money from state institutions and pensions. About $380 million of that came from the Social Security Institute, known as IPS, which manages most workers' pensions.

The fallout forced out central bank president Carlos Carvallo on Tuesday, at Peña's request. Carvallo had previously led Financiera Ueno, the bank's predecessor, before Peña appointed him to head the central bank in 2023. Arrest warrants were issued for eight ueno executives, who later turned themselves in, and prosecutors have charged 27 people over loans and overdrafts to companies in the bank's own group.

Protesters gathered in Asunción on Tuesday evening demanding their savings and Peña's removal. Sovereign bond prices fell after the resignation, while the guarani weakened past 6,500 per dollar before closing down nearly five per cent on the day, according to Reuters.

The charges against Peña

Earlier on Thursday, while Peña's resignation announcement was circulating, the Chamber of Deputies approved the impeachment charges unanimously, 78-0. The measure had been filed by 35 opposition and dissident ruling-party deputies and was backed by the Colorado bench, according to Reuters.

Opposition lawmakers accused Peña of conflicts of interest, misuse of pension funds and helping shield the bank from scrutiny. Peña has denied wrongdoing and said the affair was a regulatory issue that should be handled by the courts.

Peña had been a shareholder of Ueno Holding, with about 1.58 per cent of its shares, and maintained his business relationship with the Vázquez Group until March 2025, well into his presidency. He has said he sold his stake in the group that month and had no improper role in the bank's affairs.

Horacio Cartes, the Colorado Party president and a former president of Paraguay, said the party would back the impeachment, and Núñez publicly demanded that Peña resign. The attorney general has also referred a criminal complaint against Peña to the anti-corruption unit investigating the case.

Deputies rejected a similar impeachment motion against Vice President Pedro Alliana. That clears the way for Alliana to complete Peña's term, which runs through August 2028, if Peña is removed or his resignation is accepted.

What happens next

The Senate trial is the decisive step. If senators vote to remove Peña, Alliana takes office. If they acquit him, he returns to a presidency weakened by the loss of his party's support and by a banking crisis that has yet to return money to savers.

Congress has already passed an emergency law to speed the early return of deposits, which Peña signed on Wednesday. Peña has promised that 98 per cent of depositors will be repaid under the law, with payment instructions due to begin on Thursday.

For now, the accounts remain frozen while the central bank transfers deposits and recoverable assets to other financial institutions before liquidating what is left. The trial on Friday will determine whether the president who oversaw the crisis keeps his office, as reported by the Christian Post.

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