# Paraguay Faces Political Turmoil Following Ueno Bank Collapse Central Bank intervention at Ueno Bank triggers massive asset freezes and impeachment threats against President Peña. - **Source:** [Buenos Aires Herald](https://buenosairesherald.com) - **Published:** 2026-11-04 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/4c3b4b2e-1d29-4985-9033-15f500854236 ## Sudden Regulatory Intervention Paraguay’s Central Bank seized Ueno Bank after its solvency ratio dropped below 50% of the legal minimum. The intervention, announced Tuesday, suspended all operations, including the mobile app and physical cards. This move impacts nearly three million customers, representing approximately 60% of the nation’s adult population, as administrators begin auditing assets. ## Public Funds Exposure The collapse jeopardizes roughly US$850 million in public funds held by the institution. The Instituto de Previsión Social, managing pensions and healthcare, has approximately US$355 million invested, while the state electricity company ANDE also holds significant deposits. These entities face uncertainty as authorities work to recover state-managed capital and retirement benefits. ## Depositor Protection Limits The Deposit Guarantee Fund covers savings up to 75 minimum monthly salaries, or roughly US$38,000 per person. While officials estimate that 97% of private depositors are fully protected, those with balances exceeding this threshold must wait for the Superintendency of Banks to finalize the accounting process before receiving any potential remaining funds. ## Executive Misconduct Allegations Prosecutors have launched an investigation into alleged financial misconduct, leading to the arrest of eight senior executives, including founder and CEO Miguel Vázquez. Investigations revealed that the bank issued loans to companies directly linked to its own owners, a practice that drew warnings from the Association of Banks of Paraguay earlier. ## Political Fallout Escalates President Santiago Peña faces mounting pressure as opposition lawmakers and dissident members of the Colorado Party initiate impeachment proceedings against him and Vice President Pedro Alliana. Critics allege conflicts of interest, citing Peña’s former role as a shareholder in Ueno Holding until April 2025 and his appointment of former Ueno executive Carlos Carvallo. ## Leadership Resignation Demanded Following the scandal, President Peña requested the resignation of Central Bank President Carlos Carvallo. Although Carvallo has signed his resignation, he remains in office to oversee the bank's resolution process. Peña is now working with Congress to pass emergency legislation authorizing the use of the Guarantee Fund for immediate depositor payouts. ## Investment Reputation Risk The crisis threatens Paraguay’s standing as a stable destination for foreign capital, particularly Brazilian investment. Ueno Bank was a major player, having issued US$350 million in international bonds earlier this year. The sudden collapse of such a prominent institution undermines the economic confidence that the government has worked to cultivate since 2023. ## Defining Presidential Test This financial scandal serves as a critical test for President Peña’s administration. While the government maintains that the collapse is an isolated event and the broader financial system remains healthy, the entanglement of public pension funds and political figures suggests a long-term struggle to restore public trust and institutional credibility. ## Sources covering this story - [Buenos Aires Herald — Ueno Bank Collapse Sparks Financial and Political Crisis in Paraguay](https://buenosairesherald.com/world/latin-america/ueno-bank-scandal-threatens-paraguays-reputation-and-penas-presidency) - [MercoPress — Paraguay Seizes Ueno Bank Amid Solvency Crisis and Asset Freeze](https://en.mercopress.com/2026/11/04/paraguay-takes-over-ueno-bank-with-3-million-customers-and-freezes-its-deposits?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss) --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._