Paraguay’s Peña resigns after Ueno Bank collapse

Ueno Bank was shut down after the Central Bank of Paraguay intervened over what it described as a severe capital shortfall. The digital lender had approximately 2.9 million customers in a country of just over 6 million. It reportedly held about $800 million in public deposits, including funds belonging to social security and health programs and operators of major hydroelectric dams.

In a video posted on social media, Peña said he was resigning to protect “the stability of our country, social peace, and the need to preserve our democratic institutions.” He apologized to the public, saying he had never intended to betray their trust. Minutes later, the Chamber of Deputies voted 78-0 to impeach him and sent the charges to the Senate. A conviction would require 30 votes in the 45-member upper chamber; senators must decide whether to proceed with a trial in light of Peña’s resignation.

Demonstrators in Asunción demanded the return of their savings and accountability from officials. Police fired rubber-coated steel bullets and pepper spray to disperse protesters. Luis Pineda told The Associated Press that Peña and his Colorado Party had “stolen all our savings” and said people were fed up with “70 years of plunder.” The right-wing party has governed Paraguay for most of the past seven decades, including during the US-backed dictatorship of Gen. Alfredo Stroessner.

Peña had previously had financial connections to Ueno-linked Grupo Vázquez and appointed Carlos Carvallo, who led Ueno’s predecessor company, to head the central bank responsible for supervising the lender. Prosecutors have charged 27 bank officials and associates with alleged offenses including breach of trust and attempted fraud. Six executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale, were ordered jailed pending trial; two others were placed under house arrest.

Peña was a close ally of US President Donald Trump. In January 2026, he became a founding member of Trump’s Board of Peace, created to oversee Gaza’s postwar reconstruction. In March, he attended the inaugural Shield of the Americas summit at Trump’s Doral resort alongside Javier Milei of Argentina, Nayib Bukele of El Salvador and Daniel Noboa of Ecuador.

Lee Schlenker, a researcher at the Quincy Institute for Responsible Statecraft, said Peña’s fall followed Democratic gains in US midterm elections, Luiz Inácio Lula da Silva’s reelection in Brazil and declining approval ratings for Trump-aligned presidents in South America. He said those developments pointed to a shift in the region’s political balance.