EconomyParaguay

Paraguay impeaches President Santiago Peña after Ueno Bank collapse

Paraguay's president was impeached and placed under house arrest after Ueno Bank failed and many accounts were frozen. Customers are now getting deposit guarantee payments, which matters to anyone with money in a bank.

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Paraguay's president, Santiago Peña, has been impeached and placed under house arrest after the collapse of Ueno Bank. Vice President Pedro Alliana has replaced him as president. The crisis also froze millions of bank accounts across the country.

Ueno Bank reported that 2.94 million people were its clients, which is roughly 46% of the Paraguayan population, and that they relied on its app and its cash machines. Another figure says 60% of adults held accounts, but that number tallies accounts rather than individuals. This gap helps show how far the collapse reached.

In numbers

1.2 millionCustomers already repaid
2.94 millionUeno Bank clients
140 pointsBond spread level

Pedro Volpe, a 50-year-old writer and lawyer, woke up one Tuesday to a message from a friend asking if his account was down too. It was the day after payday. He opened his banking app and could not even see his balance.

Payments to depositors have now started. Paraguay's central bank, known as the BCP, said around 1.2 million customers of the defunct bank received their funds back in two days. Deposit guarantee payments were announced on Thursday, and the bank gave its update on Saturday after a meeting with Alliana.

Markets also took notice. Paraguay's bond spread, the extra yield investors demand over a safer benchmark, rose above 140 points after Ueno Bank failed. Brazil welcomed the new president.

Under Paraguayan law, the central bank has three options for closing Ueno Bank. Local politics also play into the contest for the 2028 election. The ex-head of the central bank has given up.

Who is who

  • Santiago PeñaImpeached president of Paraguay
  • Pedro AllianaNew president of Paraguay
  • Pedro VolpeWriter and lawyer, Ueno customer

Background

Paraguay's law gives the central bank three ways to end Ueno Bank, and the case is tied to politics ahead of the 2028 race.

Where
Paraguay
Published
Section
Economy

This article is not investment advice. It was written by our automated newsroom from published reports and official statements, using only the facts in them, and not read by a person before it was published. Report a mistake

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