In a dramatic afternoon at the capital of Asunción, the Paraguay president impeached by a unanimous vote on Thursday, occurring just minutes after he had already announced his resignation. The lower house of Congress moved to strip Santiago Peña of his office following the catastrophic collapse of Ueno Bank, a digital lender whose failure has frozen the savings of millions and sparked violent demonstrations.
The 78-0 vote against Peña signaled a total abandonment by his own Colorado Party, which joined the opposition to demand accountability. While Peña attempted to preempt the move by stepping down, lawmakers proceeded with the impeachment to send the matter to the Senate, where a two-thirds majority will be required for a formal conviction.
Unanimous Repudiation in Asunción
The political downfall of Santiago Peña followed three days of intense civil unrest. As lawmakers debated his removal, the president released a video on the social media platform X to announce his departure. He stated he was leaving for the "stability of our country, social peace and the need to preserve our democratic institutions."
Despite his resignation, the lower house's unanimous vote underscored the depth of the anger within the government. The transition of power is expected to proceed quickly, with Vice President Pedro Alliana scheduled to be sworn in as the new head of state. Alliana is slated to finish the remainder of the current term, which concludes in August 2028.
The Collapse of Ueno Bank
At the center of the crisis is the spectacular failure of Ueno Bank, a digital financial institution that grew from a small firm to a national giant in less than five years. The bank claimed to serve more than 60% of the adult population in Paraguay, many of whom are now unable to access their wages, pensions, or personal savings.
Key facts regarding the bank's downfall include:
* Public Funds: The bank held approximately $800 million in public deposits, including money from state pensions and hydroelectric dam operators.
* Insider Lending: Central bank inspectors discovered a pattern of risky loans given to companies tied to the bank’s owners without proper collateral.
* Capital Shortfall: Once regulators corrected the books to account for hidden losses, the bank's capital dropped to less than half of the legal requirement.
* Executive Arrests: Authorities have already detained eight high-ranking officials, including founder Miguel Vázquez and bank president Juan Manuel Gustale.
Conflicts of Interest and Corruption Charges
The Santiago Peña resignation has brought intense scrutiny to the president's personal ties to the failed lender. Until last year, Peña held a stake in the holding company that owned Ueno Bank. Furthermore, he had appointed Carlos Carvallo—the former head of the bank's predecessor—to lead the central bank, which was the very agency responsible for supervising Ueno.
Critics point to this proximity between the Colorado Party and the business elite as the primary cause of the disaster. While Peña expressed regret during his final address, he stopped short of taking full responsibility for the regulatory failures. "I also want to apologize to the people if I have failed them at any point," he told the public in his video statement.
Violent Protests and Economic Panic
The Asunción protests reached a boiling point this week as retirees and workers flooded the streets. Riot police utilized rubber pellets and pepper spray to manage crowds who gathered outside the Labor Ministry and Congress. Demonstrators like Luis Pineda expressed a long-standing frustration with the government, citing decades of perceived plunder by the ruling class.
The economic impact has spread beyond Ueno Bank's customers. When the bank’s app and branches were shuttered on Tuesday, a mass migration of customers to other institutions caused a surge that crashed the mobile applications of several other banks, fueling a nationwide panic. Pedro Acosta Bernal, the interim central bank president, has since appealed for calm, asserting that the broader banking system remains stable.
As the stadium that once bore the Ueno name is scrubbed of its branding, the nation remains in a state of flux. The Senate must now decide whether to convict the former president, even as Pedro Alliana prepares to lead a country grappling with its worst financial and political crisis in recent memory.
Frequently Asked Questions
Why was the Paraguay president impeached?
Santiago Peña was impeached following the collapse of Ueno Bank, a digital lender with close ties to his administration. The bank's failure froze millions of accounts and revealed a pattern of risky insider lending and regulatory oversight failures.
Who is the new president of Paraguay?
Vice President Pedro Alliana is expected to be sworn in to replace Peña. He is scheduled to serve out the remainder of the presidential term through August 2028.
What will happen to the money in Ueno Bank?
Regulators have seized the bank and intend to move customer accounts and remaining assets to other financial institutions. While some depositors have begun to receive payments, thousands of employees and retirees are still waiting to recoup lost wages and savings.