Paraguay President Ousted in Banking Crisis
Santiago Peña resigned and was impeached within hours after Ueno Bank's collapse left three million depositors locked out of their savings.
By Andrew Bennett ·
The political unraveling of President Santiago Peña moved with startling speed on Thursday. Minutes after posting a resignation video on X, the lower house of Congress voted unanimously to remove him from office. The swift action ended a week of turmoil triggered by a banking failure that left millions of citizens unable to access their money.
The crisis ignited on Tuesday when the central bank seized control of Ueno Bank, citing a severe capital shortfall. The intervention froze accounts for approximately three million depositors, a group that included many pensioners. Opposition lawmakers filed for impeachment on Wednesday, accusing Peña of favoring the bank in regulatory and pension fund decisions. Although Peña had owned shares in a group that controlled Ueno, he sold them last year.
In his final address, Peña offered an apology for failing the public. "I want to apologise to the people if at any point I failed," he said in the video. He stated that his priority was the peace of mind of Paraguayans who had entrusted their savings to the financial system. The central bank justified the takeover as a move to protect depositors and preserve the stability of the financial system.
Street anger intensified as the week progressed. On Tuesday and Wednesday, long lines of people trying to withdraw cash stretched from Ueno branches down the streets of Asuncion. Protests swept the capital both evenings. Hundreds of demonstrators demanding Peña's removal clashed with police, who deployed tear gas and water cannons to disperse the crowds.
Peña attempted to stabilize the situation before his departure. He requested the resignation of Central Bank president Carlos Carvallo, who subsequently stepped down. He also enacted a law limiting the return of most frozen funds to five business days. These measures failed to quell the unrest. During the Thursday debate, ruling party deputy Alejandro Aquilera supported the removal. "In the face of these accusations I can't pretend to be oblivious," Aquilera said. He noted that more than three million Paraguayans felt harmed and deceived.
Peña, who served as finance minister before becoming president in 2023, will be replaced by Vice President Pedro Alliana. Alliana now takes over leadership of the country following the unanimous vote in the lower house.
