Paraguayan president resigns over bank collapse

Paraguayan President Santiago Pena has resigned amid a widespread financial crisis and political pressure. He announced his resignation on Thursday (November 5) after allegations of conflict of interest and financial irregularities emerged over the collapse of the country's largest digital bank, Ueno.

Reuters reports that the collapse of the bank has left nearly half of the country's population without access to their bank accounts. Ueno Bank had about 3 million customers in Paraguay, a country of about 6.5 million people.

In a video message recorded on Thursday, Pena said he decided to resign out of consideration for the country's stability, social peace, and the protection of democratic institutions.

However, his resignation must be approved by the Senate for it to take effect. Lawmakers have said the Senate could decide quickly to ensure a swift and orderly transfer of power. Congress is scheduled to meet to formally accept the resignation at 2 p.m. local time on Thursday. Vice President Pedro Aliana could then be sworn in as president around 3:30 p.m.

Paraguay's political situation has been tense for several days over the financial collapse of Ueno Bank. The head of the country's central bank resigned on Tuesday due to the crisis. On the same day, arrest warrants were issued for eight bank officials. They later surrendered. As part of the investigation, a court has ordered the seizure of their assets. Some officials have also been ordered to be placed under house arrest.

Meanwhile, opposition parties called a special session of Congress on Thursday to begin the impeachment process. Protests were also taking place on the streets demanding the president's resignation. In such a situation, Pena also lost the support of a section of conservative leaders in his own party. As a result, his political position became even weaker.

Penny's business relationship with the bank

The collapse of Ueno Bank has brought President Peña Nieto's past business dealings into the spotlight. The economist, who was elected in 2023, was a shareholder in Grupo Vásquez, the bank's owner. He had business dealings with the company until March 2025.

Lawmakers have accused Pena of conflicts of interest, misuse of pension fund funds, and institutional cover-up of irregularities in the bank's financial collapse. Pena has repeatedly denied these allegations, saying a technical and regulatory issue has become a political controversy. If there is a crime, it should be investigated and prosecuted through the courts.

The country's central bank intervened after reviewing Ueno's financial situation and finding evidence of failure to meet minimum solvency requirements. The crisis then escalated. The bank was also responsible for managing about $850 million in government funds.

In announcing his resignation, Pena said his main expectations were to ensure the return of stuck funds, play the proper role of the Deposit Protection Fund, and ensure the safety of public money.