Paraguayan President Santiago Peña was placed under house arrest on Friday, November 6, 2026, on suspicion of breach of trust. His detention followed a Senate vote to remove him from office, marking the culmination of a political and financial crisis triggered by the collapse of Ueno Bank, a digital lender with deep ties to his administration.
Paraguay president impeached minutes after resigning following bank collapse
The crisis began on November 2, 2026, when the Central Bank of Paraguay’s board voted to place Ueno Bank into resolution over its solvency ratio. Regulators found poorly documented lending and expenses that had been incorrectly accounted for as assets. Ueno had exploded from an obscure finance company to a household name in less than five years and was owned by the Grupo Vázquez conglomerate. By the time of its collapse, the bank had attracted roughly 3 million customers—about 60% of the adult population.
The bank’s closure had severe economic consequences. Some 7,000 employees were impacted by the bank’s closure, left with unpaid wages. While the central bank initiated a guarantee process to reimburse depositors, the turmoil caused significant market instability. In the days following the seizure, the value of the dollar surged against the Paraguayan guaraní by approximately 10.2%, and Bitcoin traded at a premium in local peer-to-peer markets as citizens sought alternatives to the traditional banking system. Protesters across the capital held signs calling Peña the enemy of savers,
while riot police used pepper spray and rubber bullets to manage the crowds.
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Ousted Paraguayan president placed under house arrest
The bank held between $800 million and $850 million in deposits from state and pension entities, including significant portions of the Social Security Institute (IPS) pension and health funds. Prosecutors have charged 27 people, including bank founder Miguel Vázquez, with crimes such as breach of trust and attempted fraud.
Peña, who served as Minister of Finance from 2015 to 2017 under former President Horacio Cartes, had maintained business links to the bank’s holding company until 2025. Although he denied wrongdoing and dismissed initial reports of irregularities as a false media campaign,
the political fallout was immediate. Party vice president Rodolfo Friedmann advocated for the president’s removal, whereas Senate President Basilio Núñez stood by Peña, shifting the blame toward the central bank. However, as the crisis deepened, the party leadership, led by former president Horacio Cartes—the party chief and Peña’s longtime mentor—turned against him.
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Ousted Paraguayan president placed under house arrest after bank
The transition of power was swift. Following the Chamber of Deputies’ unanimous vote to trigger impeachment, Peña submitted his resignation, stating in a video address, I do so thinking of the stability of our country, social peace and the need to preserve our democratic institutions.
Congress did not accept the resignation, and the Senate subsequently removed him from office, which stripped him of his parliamentary immunity. With 44 of 45 senators voting in favor of removal, Peña became the second Paraguayan president to be ousted by impeachment since the nation returned to democracy in 1989.
Vice President Pedro Alliana was sworn in as the new president shortly after the vote, despite being suspected of involvement in the Ueno Bank scandal—accusations he has denied. A magistrate has mandated pretrial detention for six former Ueno directors, such as founder Miguel Vázquez and bank President Juan Manuel Gustale, while two others were placed under house arrest; additionally, authorities have sought the arrest of former central bank chief Carlos Carvallo, who managed the finance firm that evolved into Ueno before being appointed to lead the central bank by Peña in 2023. As the country grapples with its position on Transparency International’s 2025 Corruption Perceptions Index—where it ranked 150th of 182 countries and territories—the new administration faces the challenge of restoring public trust in institutions.
Earlier coverage: Paraguay Crisis: Ueno Bank Collapse and President Peña Impeached
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More on Ueno Bank
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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
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
[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
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