Paraguay lawmakers move to impeach Peña over bank collapse

Paraguay's central bank has placed ueno, a digital bank with about 3 million customers, into resolution, suspending services and freezing customer accounts, and opposition lawmakers are moving to impeach President Santiago Peña over the collapse, The Rio Times reported. Reuters reported that the bank crisis had spurred lawmakers' calls to impeach the president.

The central bank acted on 3 November, five days after ueno presented a capital plan on 29 October, following weeks of Senate questions, according to The Rio Times. The report said the bank's solvency index, which measures capital against risk, fell below half the required minimum.

Savers found their cards unusable on Tuesday and protested in Asunción, the capital, demanding their money back. Some also demanded that Peña answer for the bank's failure, The Rio Times reported. Eight ueno directors and officials were detained, including founder Federico Vázquez and chairman Juan Manuel Gustale. Prosecutors are investigating possible irregularities at the bank.

Peña, a conservative who took office in 2023, held shares in the group behind ueno until 2025, the report said. Carlos Carvallo, whom Peña named central bank president in 2023, had previously run Financiera ueno, the finance company from which the bank grew. Carvallo resigned on Tuesday but stays on while the resolution process runs, according to The Rio Times.

Opposition lawmakers began the impeachment push on Tuesday, seeking to remove Peña and Vice President Pedro Alliana for poor performance of their duties. The governing side says there are no grounds to remove either man. The opposition needs a majority in Congress, and no date for a vote has been set.

Ueno held hundreds of millions of dollars of public money, including deposits from the state pension fund, the Instituto de Previsión Social, The Rio Times reported. Opposition senator Rafael Filizzola said that makes the president's link to the case direct. Savers are covered up to about US$38,000 each by a state deposit fund. Holders of ueno's US$350 million of dollar bonds face uncertainty over who is paid first under resolution rules.

Peña has announced emergency measures and a bill to speed up refunds, and he met the heads of both chambers of Congress to push it through. He nominated Raúl Vera Bogado to lead the central bank, which Congress must approve. It is not known how much money sits in ueno or what the rescue will cost. Peña said payments would begin this week, while the central bank had earlier said about 15 days.