Paraguay's Pro-Israel President Resigns Amid Major Bank Crisis
Translated & summarized from N12 by baba
Paraguayan President Santiago Peña resigned amid a financial and political crisis after Ueno Bank collapsed, leaving three million customers without access to their funds. The crisis sparked protests and an impeachment attempt against Peña, who had past business ties to the bank. Vice President Pedro Alliana is expected to take over the presidency to address the fallout, including recovering customer funds and restoring public trust.
The story in 6 lines · by baba
- Paraguay's President Santiago Peña resigned due to a crisis at Ueno Bank, which left 3 million customers unable to access funds.
- The collapse of Ueno Bank led to widespread protests and an impeachment effort against President Peña.
- Peña had past business ties to the bank's parent company and appointed the Central Bank governor.
- Authorities are investigating bank executives, with eight arrested and 27 indicted on fraud and breach of trust charges.
- Vice President Pedro Alliana is expected to succeed Peña and manage the crisis's aftermath.
- Peña was known for his pro-Israel stance and moved Paraguay's embassy to Jerusalem.
Paraguayan President Santiago Peña announced his resignation on Thursday following a severe financial and political crisis triggered by the collapse of Ueno Bank, one of the country's largest digital banks. The bank's failure left approximately three million customers unable to access their accounts, sparking widespread public protests and an impeachment effort in parliament. Peña stated his decision was made with consideration for the nation's stability, social peace, and democratic institutions, apologizing to the public for any disappointment but not accepting direct responsibility for the banking crisis. His primary goal, he said, is to ensure customers can recover their funds. Vice President Pedro Alliana is expected to succeed him.
The crisis escalated after the Central Bank of Paraguay took control of Ueno Bank, citing its failure to meet capital and financial stability requirements. The bank, which had grown rapidly and served nearly half of Paraguay's population, had its operations suspended, leaving millions, including pensioners, without access to their savings. Reports indicate the bank managed between $800 million and $850 million in public funds, including those from the government's pension and health funds.
The bank's collapse caused panic in the financial system, with customers rushing to other banks and causing technical issues. Protests erupted in the capital, Asunción, with demonstrators demanding their savings back and calling for the president's removal. Police used tear gas and crowd dispersal tactics against the protesters. Bank employees and other companies within the holding group also protested, demanding unpaid wages and severance.
Peña faced intense criticism due to his past business ties to the bank. He held shares in the parent company, Grupo Vázquez, until March 2025 and appointed Carlos Carvallo, formerly head of a predecessor financial body, as the Central Bank governor after taking office in 2023. Opposition lawmakers accused him of conflicts of interest and misuse of pension funds. Authorities have launched an investigation into bank executives, arresting eight senior officials, including the bank's founder and president, and indicting 27 managers and businessmen on charges including breach of trust and attempted fraud. Investigations revealed suspicions of risky loans to parties connected to the bank's owners and improper record-keeping.
Peña, 47, an economist and former International Monetary Fund official, was known for his strong pro-Israel stance, having moved Paraguay's embassy to Jerusalem in December 2024. Following his resignation, Vice President Alliana is set to assume the presidency and confront the fallout from the banking crisis, public unrest, and diminished public trust in state institutions.
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