Santiago Peña resigned as president of Paraguay on Thursday, two days after the central bank seized Ueno Bank, a digital lender with close ties to his government that held about $800 million in public deposits, the AP and Reuters reported.
ASUNCIÓN — Paraguayan President Santiago Peña resigned on Thursday, two days after the country’s central bank seized Ueno Bank, a digital lender with close ties to his government, the Associated Press and Reuters reported. Peña announced the decision in a video posted to X as protests filled the capital for a third day and lawmakers debated his impeachment. “I have made the decision to submit my resignation as president of the republic,” he said, citing stability, social peace and democratic institutions.
The sequence is the story. On Monday, regulators said Ueno’s books showed poorly documented loans and expenses wrongly counted as assets, and once those were corrected its capital fell below half the legal minimum. On Tuesday the central bank seized the bank, and its app, cards and branches went dark. By Thursday Horacio Cartes, the president of the ruling Colorado Party and Peña’s longtime political patron, had announced that the party would back impeachment, and the president was gone. Vice President Pedro Alliana is set to finish the term, which runs to 2028.
How a bank became the president’s problem
Ueno won its banking license in 2023 and grew at remarkable speed. The AP reported that it came to count more than 60% of Paraguay’s adults as customers, and La Nación put its client base at more than three million people, about half the population. Public money followed. As of last month Ueno held roughly $800 million in public deposits, about a quarter of its total, including funds from the state pension and health system and from the operators of the country’s hydroelectric dams. Peña was a shareholder of Ueno’s holding company until March 2025, and soon after taking office in August 2023 he named Carlos Carvallo, the head of Ueno’s predecessor finance company, to run the central bank that supervises it. Carvallo resigned this week at Peña’s request.
The warnings were on the table. In June, central bank inspectors found a pattern of lending to insiders beyond what the law allows, ABC Color reported, including nearly $39 million sent to three related companies on a single day in September 2025. As recently as last month Peña defended Ueno and the central bank’s oversight, dismissing the concerns as a smear campaign. Eight senior executives, including founder Miguel Vázquez, are now in custody, and prosecutors have charged 27 people. Our earlier report on the seizure of Ueno Bank covered the first hours of the collapse.
Why it matters
Paraguay is Brazil’s neighbor and Mercosur partner, and Reuters described Peña as an ally of President Donald Trump. Investors had treated his government as a model of steady economic management, and it lost its president within a week over a single bank. That is a lesson in how fast confidence moves in the region, the same one visible in the foreign money leaving Brazil as the Lula regime heads into another term, and in a Treasury that, as we reported, does not accept speeches as payment.
The record
Confirmed: Peña’s resignation, in his own video; the central bank’s seizure of Ueno; Carvallo’s departure; the detentions and charges brought by prosecutors; and Peña’s past stake in Ueno’s holding company. Alleged: the opposition, which filed the impeachment request with 35 deputies, accuses Peña of a conflict of interest, manipulating rules and diverting pension funds. Peña apologized to the public but stopped short of accepting responsibility for the crisis. La Nación reported that a criminal complaint against him was referred to the prosecutors’ anticorruption unit, and no charges against him had been reported.
The closing point is about institutions. Paraguay ranks worse than every South American country except Venezuela on Transparency International’s corruption index, according to the AP, and its Congress, its prosecutors and the president’s own party still moved against a sitting leader in two days. Brasília has to answer the same question: would the same machinery turn on the top of the Lula regime if a bank tied to it failed with retirees’ money inside?
The Watch Post Daily will continue to follow this story. Sources: Associated Press, Reuters, La Nación, ABC Color.
Featured image: Congreso Nacional de Paraguay by FF MM, via Wikimedia Commons, CC BY-SA 3.0.
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