Three Million Accounts Frozen as Ueno Bank Collapse Paralyzes Paraguay
Nearly three million citizens found themselves unable to access their savings after the Central Bank of Paraguay seized Ueno Bank amid a catastrophic financial collapse, tg24.sky.it reported. Founded in 2021 as a digital fintech startup, the institution had rapidly expanded into one of the country’s dominant credit pillars. It ultimately grew to manage approximately 850 million dollars in public funds, including state deposits and social security reserves.
Regulators Discover Severe Accounting Irregularities and Insider Loans
Behind the aggressive commercial growth and heavy digital marketing lay deep structural weaknesses and regulatory failures. Regulators discovered severe accounting irregularities alongside high-risk loans granted to companies directly linked to the bank’s controlling shareholders. According to Il Post, Ueno Bank’s solvency coefficient—the measure of available capital against debts—dropped to less than half the legal minimum. The Grupo Vázquez conglomerate owns the bank, and conservative President Santiago Peña held shares in the holding company until March 2025, according to tg24.sky.it and Corriere della Sera.
Anxious Customers Form Long Queues Outside Locked Bank Branches
Long queues formed outside locked bank branches as anxious customers tried in vain to withdraw money. To contain the fallout, first reimbursements to depositors began through the Central Bank’s deposit guarantee fund, which should cover 97 percent of depositors, though public funds totaling over 860 million dollars—including pensions for 32,000 retirees tracked by Corriere della Sera—remained a source of public anxiety.
Impeachment and the Arrest of Santiago Peña
Prosecutors issued an arrest warrant ordering law enforcement to detain Peña at his residence and transfer him to the specialized economic crimes and anti-corruption unit, as reported by tg24.sky.it. Peña announced his resignation in a video message on X, apologizing to the public for the betrayal of trust. However, the National Congress rejected his resignation. Moving swiftly through an impeachment proceeding, the Senate voted unanimously to convict Peña of gross misconduct in office, as detailed by ANSA and Il Post. Vice President Pedro Alliana subsequently took the presidential oath to finish the term through 2028, while the Organization of American States urged strict adherence to the rule of law.
Frequently Asked Questions About the Paraguay Banking Crisis
Why did the Central Bank freeze Ueno Bank accounts?
The Central Bank intervened after discovering that Ueno Bank’s capital had plummeted to less than half the legal minimum due to high-risk insider loans and severe accounting irregularities.
Who took over the presidency after Santiago Peña’s removal?
Vice President Pedro Alliana was sworn in as the new president of Paraguay after the Senate voted unanimously to convict Peña in an impeachment trial.
Are depositors getting their money back?
First reimbursements have begun through the Central Bank’s deposit guarantee fund, which should cover 97 percent of depositors.