Paraguayan President Santiago Pena resigned on Thursday amid a political crisis caused by the collapse of Ueno Bank. This situation left millions of customers unable to access their accounts. In a video message, Pena said, "I do so with the stability of our country, social peace and the need to preserve our democratic institutions in mind." His resignation came after lawmakers began impeachment proceedings against him.
Key Details
The crisis started when Ueno Bank went bankrupt, freezing operations for about 3 million customers. This number represents roughly 60% of Paraguay's adult population. The bank handled pension payments and held significant public funds, including $800 million in deposits, according to reports. Lawmakers accused Pena of conflicts of interest and misuse of pension funds. They pointed out his previous ownership stake in Ueno Holdings until April 2025. They also highlighted two loans he received from the bank as proof of improper financial gain.
Background
Pena's resignation followed a loss of support from key members of his ruling Colorado Party, including Congress President Basilio Nunez. The Central Bank of Paraguay stepped in after finding that Ueno Bank had violated minimum solvency requirements. This intervention sparked widespread protests calling for Pena's resignation. After his departure, Vice President Pedro Alliana will take over as president.
The political unrest in Paraguay may lead to increased volatility in local financial markets. This situation could particularly affect banking stocks and government bonds. Investors will likely watch the situation closely, especially regarding public funds and the future of Ueno Bank. Keep an eye on developments in the impeachment process and any actions taken to restore confidence in the banking sector.
Based on reporting by: bbc.co.uk, dw.com