Bank collapse sinks Paraguay's President Santiago Peña, who resigns as customers fear their savings are gone
President had downplayed fears in recent weeks after worrying reports about Ueno's stability
Paraguayan President Santiago Peña resigned hours after the country's central bank seized Ueno Bank, which claimed more than 60 per cent of the country's adults as customers.
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which → sink → customers
Peña, who was facing an impeachment proceeding in the bank collapse that has seen demonstrators clash with riot police, said he made his decision for "the stability of our country, social peace and the need to preserve our democratic institutions."
Resigning just over three years into a five-year term, Peña offered an apology but stopped short of accepting responsibility for the banking crisis.
"It was never my intention to betray the trust they placed in me," he said, adding his priority was ensuring depositors recovered their savings.
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depositors → face → savings
Hundreds of employees of Ueno Bank and other companies belonging to Grupo Vázquez, the bank's parent conglomerate, protested outside Paraguay's Labour Ministry on Thursday, demanding severance and unpaid wages, with their jobs in limbo and their salaries trapped at the failed bank.
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salaries → belong → bank
People queue outside a branch of the Banco Familiar in Asunción on Wednesday, hoping to withdraw savings that originally were held at Ueno.
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that → queue → Ueno
A day earlier, hundreds of retirees, depositors, university students and workers flooded the streets of Asunción, the capital.
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hundreds → flood → Asunción
"We want your head, Peña!" they shouted.
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they → want → head
Their signs demanded Peña's impeachment, called him "the enemy of savers" and pleaded, "Give us back our money."
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signs → demand → money
Riot police fired pepper spray and rubber pellets to push back the crowds.
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police → fire → crowds
By Thursday morning, a rebellion by several members of Peña's own conservative Colorado Party had become a party-wide revolt.
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rebellion → become → Party
Both of the ruling party's main factions in the lower house had pledged to back impeachment, and former president Horacio Cartes, Colorado's powerful leader, withdrew his support for Peña.
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Cartes → rule → Peña
Peña, a 47-year-old former International Monetary Fund economist, had approved emergency payouts to depositors on Wednesday and named a new central bank chief.
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Peña → approve → chief
Bank linked to president, allies
The political upheaval and promises of relief leave a bigger question unanswered: how a bank linked to the president, who until last year had a stake in Ueno's holding company, could grow so rapidly in size and importance despite repeated warnings about its dubious lending practices.
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who → link → practices
Soon after winning its banking licence in 2023, Ueno seemed to be everywhere in Paraguay.
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Ueno → win → Paraguay
The digital lender — a rebranded version of a decades-old finance company — lured customers with generous cash-back offers on groceries, grew to more than 70 locations, sponsored Paraguay's national soccer team and plastered its name on the country's main stadium.
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lender → lure → stadium
Ueno Bank depositors clash with police on Tuesday night in Asunción.
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depositors → clash → Asunción
Government money poured into Ueno's coffers under Peña.
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money → pour → Peña
He also appointed Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank — the agency charged with supervising the digital lender.
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He → appoint → lender
As of last month, Ueno reported holding roughly $800 million US in public deposits, about a quarter of its total, including money from the state pension and health fund, and the operators of Paraguay's giant hydroelectric dams.
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Ueno → hold → dams
Even as retirees' savings and other public money piled up at Ueno, worries were escalating inside the central bank.
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worries → pile → bank
In June, its inspectors found a pattern of risky lending to insiders, reported ABC Color, a leading Paraguayan newspaper.
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Color → find → insiders
Ueno had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral to cover the debts if they went bad.
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they → extend → debts
On a single day in September 2025, nearly $39 million had gone to three such companies.
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million → go → companies
Peña repeatedly brushed off the warnings.
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Peña → brush → warnings
As recently as last month, he defended Ueno and the central bank's oversight, dismissing the concerns as a smear campaign that was spooking the public.
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that → defend → public
Bank executives arrested
But on Monday, it all came crashing down.
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it → arrest → Monday
Regulators investigating Ueno's loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets.
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bank → investigate → assets
Once the books were corrected, Ueno's capital, the cushion banks must keep to absorb losses, fell to less than half the legal minimum.
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banks → correct → minimum
The central bank seized the lender on Tuesday and announced plans to move customers' accounts, along with whatever assets that still hold value, to other banks, before liquidating what's left.
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what → seize → banks
Ueno's app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside with no way to cash out their savings.
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branches → go → savings
On Wednesday, a rush to open new accounts elsewhere crashed other banks' mobile apps, fuelling public panic.
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rush → open → panic
"This is yet another assault on honest, hard-working citizens, people whose small savings are the fruit of years of labour," said protester Belarmino Balbuena.
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Balbuena → work → labour
Executives of Ueno Bank, taken over by Paraguay's central bank amid a solvency crisis, are taken into custody Wednesday at the anti-corruption prosecutor's office in Asunción.
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Executives → take → Asunción
Officials appealed for calm and said they had begun repaying depositors, opening new accounts elsewhere for about 280,000 customers who had banked only with Ueno.
Authorities have detained eight senior Ueno executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale.
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Authorities → appeal → Vázquez
Prosecutors also charged 27 bank officials and business associates with offences that include breach of trust and attempted fraud.
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that → charge → trust
Lawyers for several of the detained said they needed time to review the allegations before they could comment.
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they → detain → allegations
At the national stadium that once bore Ueno's name, the bank's logo had already been scrubbed away.
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logo → bear → name
But across the capital, fresh graffiti denounced politicians as thieves.
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graffiti → denounce → thieves
The Aporia
