Paraguay's Ueno Bank collapse triggers political crisis and impeachment push

Paraguay’s President Santiago Pena faces impeachment after the collapse of Ueno Bank, a major digital bank, plunging the country into its deepest political crisis in over a decade. Pena announced his resignation Thursday, but politicians filed formal impeachment charges against him. The central bank placed Ueno into resolution Monday after its solvency ratio fell below half the legal requirement, freezing accounts for nearly 3 million customers, about 60 percent of Paraguay’s adult population. Regulators found risky insider lending, including $146 million in loans to companies tied to owner Grupo Vasquez, where Pena held a stake until March 2025. Paraguay’s Congress approved a state-guaranteed fund to repay depositors within five business days, covering up to about $36,000 per customer. Prosecutors have charged 27 bank officials and ordered three criminal investigations, including into Pena’s involvement, while the country’s history includes a prolonged banking crisis from the mid-1990s to early 2000s.