Under the anguished, enraged gaze of millions of Paraguayans, the country’s right-wing president, Santiago Peña, announced his resignation amid opposition calls to initiate impeachment proceedings over his alleged responsibility for the closure of Ueno Bank, one of the South American nation’s most important financial institutions.

“With the conviction that our republic must always take precedence over any individual or circumstance … I have decided to submit my resignation as president of the republic. I do so with the stability of our country, social peace, and the need to preserve our democratic institutions in mind,” Peña said in a televised address.

Peña has been embroiled in serious allegations after his government transferred millions of dollars to Ueno Bank (nearly $850 million in public funds, including money from the Social Security system), an institution that announced its closure this week, despite having boasted for years of financial stability and growth in depositors, according to Manuel Gustale, former president of Ueno.

However, on November 3, the Central Bank of Paraguay announced the bank’s dissolution after its solvency ratio fell below the minimum allowed under Paraguayan law.

Hundreds upon hundreds of depositors at the bank in question took to the streets and demanded the return of their money, which was not possible due to the government’s freezing of the accounts.

The situation is even more serious when one considers that a single business conglomerate managed to control not only the life savings of nearly all pension funds but also the savings of the majority of adults in Paraguay.

Thus, the decision to freeze the accounts comes on top of several allegations of possible links between President Peña and the business group that controls Ueno Bank, which has raised suspicions of conflicts of interest involving Peña and Central Bank President Carlos Carvallo.

For months, several Paraguayan institutions had been warning of a possible collapse of Ueno when it was discovered that the bank was granting excessive loans to companies linked to its own owners.

“And yet, public funds kept flowing in. This isn’t simply the story of a poorly managed bank. It’s a system in which the bank, the regulatory body, and the presidency were so closely intertwined that none seemed capable of holding the others in check,” Orkun Saka, a professor at St. George’s University of London, told the BBC.

Peña’s resigns after his party pursues impeachment

But the final blow to the current administration came from its own party, the right-wing Colorado Party – which has governed the country for much of the past few decades – when former President Horacio Cartes (a member of the same party) announced that the party would support impeachment proceedings against Peña.

“We will not stand idly by while public, private, and pension funds are plundered; we must think of the people and the values we uphold as the Colorado Party. We support the impeachment of the President of the Republic, Santiago Peña, in order to restore the Republic’s institutional framework,” Cartes said in a statement.

Once Peña realized that his party (which was clearly aware of his past as a shareholder long before the crisis erupted) had withdrawn its support, he appeared before the cameras and announced that he would step down. However, the opposition and the Colorado Party stated that they would press ahead with the trial to determine the executive branch’s potential responsibility in the financial and political crisis rocking Paraguay.

According to some reports, Peña was listed as a shareholder of Ueno Holding, a conglomerate of companies controlled to a greater or lesser extent by the Vázquez Group, the main shareholder group of Ueno Bank.

And while Peña announced in early 2025 that he was no longer a shareholder of Ueno Holding, many question whether his political decisions regarding the institution were influenced by his own economic interests and those of the Vázquez Group. Added to this is the fact that the president of the Central Bank was also president of Ueno Bank, and that during Peña’s presidency, the Central Bank approved Ueno’s conversion into a bank in 2023. This highlights a close relationship between the executive branch and the failed bank.

That is why opposition Senator Rafael Filizzola has said that the case constitutes: “the largest scam perpetrated by those in political power in the democratic era … It involves a bank created by those in political power to use public funds for private business ventures linked to political power, with the President of the Republic at the helm.”

According to Filizzola himself, the losses from this case could amount to some $3 billion, which creates enormous uncertainty for the millions of Paraguayans who do not know when or if they will get their money back.

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