Senate removes Santiago Peña from office
Paraguayan lawmakers voted unanimously on Friday to remove President Santiago Peña from office, triggering his immediate arrest on charges of breach of trust and influence peddling. All 44 senators present at the session supported the impeachment, marking the second time a Paraguayan president has been ousted since the 1989 end of Gen. Alfredo Stroessner’s 35-year dictatorship.
The impeachment followed the collapse of Ueno Bank, an institution that regulators seized on Tuesday. The bank’s failure locked millions of citizens out of their savings, sparking widespread protests across the country. Prosecutors have ordered Peña to remain at his home in Asunción until he appears for questioning on Saturday morning. “It has been established that he is indeed inside his home,” a public prosecutor told local media.
Bank collapse triggers national crisis
The sudden seizure of Ueno Bank left approximately three million people—nearly 60% of the adult population—unable to access their savings, pensions, or wages. Lawmakers allege that Peña used his political influence to steer hundreds of millions of dollars in public and pension funds into Ueno while regulators ignored risky insider lending practices. Central bank inspectors discovered in June that the bank had extended loans to companies tied to its own owners in amounts that exceeded legal limits. In September 2025 alone, records indicated nearly $39 million was transferred to three such companies.
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Conflicts of interest and political fallout
Peña’s political career was closely tied to his mentor, former president Horacio Cartes, who leads the conservative Colorado Party. Analysts suggest that while Peña rose to power as a technocrat under Cartes, he later attempted to establish an independent base of power using Ueno Bank as a financial anchor. “Cartes put the nail in the coffin,” said Andrew Nickson, a Paraguay expert at the University of Birmingham.
Evidence of personal ties to the institution complicated his position. Peña held approximately $1 million in shares in the company that became Ueno Holding, which he did not divest until April 2025. He said he had bought them purely as an “investor”. Prosecutors have also ordered the arrest of Carlos Carvallo, the current central bank chief whom Peña appointed in 2023. Carvallo previously served as the CEO of the finance company that eventually became Ueno Bank. It remains unclear whether Carvallo is currently in custody.
When things happen in Latin America, sometimes they happen very fast. Santiago Peña, Paraguay's president until yesterday, is now under arrest:https://t.co/GGRFKkcOTN
Transition of power to Pedro Alliana
Vice-President Pedro Alliana was sworn in as president on Friday and is set to serve the remainder of the term, which concludes in August 2028. Alliana faces immediate pressure to stabilize the financial system and address the demands of depositors who have been unable to withdraw their money for basic needs.
The new administration inherits a government under significant scrutiny. Alliana himself is currently under investigation regarding the circumstances of the bank’s collapse. In a final message before the Senate verdict, Peña stated that he did not want his presence to cause further instability, though he denied any wrongdoing. His defense lawyer, Ricardo Preda, characterized the charges as a “reckless accusation” that was “irresponsible and opportunistic.” Senator Rafael Filizzola said: “We are facing the biggest corruption scandal in our democratic history – a tremendous blow to the state, to private citizens, and to the country’s credibility and image.”
Frequently asked questions about the impeachment
Why did the Senate reject the president’s resignation? However, the Senate chose to proceed with impeachment to strip him of the legal immunity typically granted to former presidents, which allowed prosecutors to move forward with criminal charges immediately. Afterwards, senate president Basilio Núñez said Peña was found guilty of “dereliction of duty”.
What are the specific charges against the former president? If convicted on the most serious charges, he could face up to 10 years in prison.
I have to remind myself that other countries do sometimes hold their presidents accountable for crimes and corruption. Something to aspire to. https://t.co/kfCMYb8RMc pic.twitter.com/O6M8dP1CI4
How many people were impacted by the bank’s failure? The seizure of Ueno Bank affected approximately 2.9 million people, or about 60% of the country’s adult population.
More on Santiago Peña
[Paraguay’s president quits after millions of people’s savings frozen in bank crisis] “Santiago Peña’s rightwing administration had authorised Ueno Bank to drastically expand operations before collapse“https://t.co/yuycS6Kl3g””
Ousted Paraguayan President Santiago Peña is under house arrest on suspicion of breach of trust. He was detained shortly after the Senate removed him from office following a bank collapse. https://t.co/EXWR8dAi2V
BREAKING: Paraguay's Senate votes to remove President Santiago Peña from office following the Ueno bank collapse. https://t.co/0TLZgj5w6e
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