Paraguay’s Peña quits as ueno bank collapse sparks impeachment drive

Peña announced his decision in a video address published on his official X account, saying he was leaving office with the country’s stability, social peace and the preservation of democratic institutions in mind.

“I want to apologize to the people if at any point I failed. It was never my intention to betray the trust you placed in me,” he said.

The president also called for the protection of depositors and state resources. “My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfill its purpose, and that public funds, as well as the resources that belong to all Paraguayans, be protected,” Peña said.

The resignation did not halt proceedings in Congress. Opposition lawmakers had convened an extraordinary session for the same day to open impeachment proceedings, and the Chamber of Deputies went on to approve the motion against Peña while rejecting a parallel motion targeting Vice President Pedro Alliana. According to the Chamber of Deputies, 35 lawmakers had formally requested proceedings against both officials.

The case now goes to the Senate, which must also ratify the resignation. A Senate impeachment trial could delay the transfer of power. Under Article 189 of Paraguay’s Constitution, democratically elected former presidents become senators for life unless they are impeached and found guilty, meaning the outcome could affect Peña’s political future.

Alliana, a veteran of the ruling Colorado Party who led the Chamber of Deputies from 2019 to 2022 and chaired the party from 2015 to 2023, is first in the constitutional line of succession. He is expected to serve out the remainder of the term, which ends in August 2028.

Lawmakers had accused Peña of conflicts of interest, misuse of pension funds and institutional cover-ups linked to ueno. The lender had expanded rapidly from a niche fintech company into a mid-sized bank managing close to $850 million in public funds.

Paraguay’s central bank took control of ueno after finding that it had fallen below minimum solvency requirements. The intervention froze the accounts of roughly 3 million customers in a country of 6.5 million people. Ueno has not commented publicly on the situation.

Peña, an economist and former finance minister who took office in August 2023, held shares in Grupo Vázquez, which owned the bank until March 2025. He has repeatedly denied any improper links, describing the dispute as a technical and regulatory matter that had been turned into a political issue, and has said any wrongdoing should be handled by the courts.

The fallout had already forced out central bank president Carlos Carvallo, who resigned at Peña’s request. Prosecutors issued arrest warrants for eight ueno executives on Tuesday, and all of them later surrendered to authorities. Courts have frozen their assets as the investigation expands, and several of the executives have been placed under house arrest.

The crisis has also rattled investor confidence in Paraguay, a close ally of U.S. President Donald Trump’s administration that has long attracted capital from neighboring Brazil. The country’s international sovereign bonds fell sharply after news of the resignation.

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