Santiago Peña Resigns Amidst Ueno Bank Financial Collapse Scandal
Paraguayan president steps down following controversy over state deposits in insolvent bank.
1Presidential Ties to Ueno
Former Paraguayan President Santiago Peña faced intense scrutiny due to his personal financial history with Miguel Vázquez, the majority shareholder of Grupo Vázquez. Between 2019 and 2025, Peña invested in Vázquez's companies, creating a significant conflict of interest. This relationship predated his 2023 presidency but became problematic as Ueno Bank received massive public funds.
2Record State Fund Deposits
The administration transferred over 800 million dollars in public resources to Ueno Bank, marking a record volume for a single institution. By September 2024, these deposits accounted for approximately 20 percent of all state savings held in the banking system. These funds included substantial portions of the national social security agency's capital reserves.
3Regulatory Red Flags Raised
In 2025, officials from BID Invest identified irregularities during an assessment for a potential equity stake. They noted suspicious loans between companies linked to Grupo Vázquez and an unusually low delinquency rate of 2 percent. Despite a previous 20 million dollar loan in 2024, the institution failed to provide full repayment to the organization.
4Central Bank Investigation Triggered
Scrutiny intensified in September 2026 after local media published internal documents and emails suggesting widespread credit irregularities. The Central Bank of Paraguay initiated a formal investigation, forcing Ueno to restate its accounts. Following these corrections, the bank's solvency index plummeted below the mandatory minimum, leading to its official declaration of insolvency on November 3.
5Institutional Leadership Fallout
The crisis extended to the Central Bank's leadership, as President Carlos Carvallo resigned shortly after ordering the bank's closure. Carvallo had previously served as a director for the entity that eventually became Ueno Bank. His departure highlighted the deep-seated professional connections between the financial regulatory body and the private banking group under investigation.
6Political Resignation and Pressure
On November 5, the Chamber of Deputies voted unanimously to impeach President Santiago Peña. Facing certain removal, Peña resigned before the Senate could finalize the proceedings. The political atmosphere remained volatile as several senators abandoned the chamber in protest, leaving the legislative process regarding his formal exit without a definitive, unified resolution.
7Impact on Bank Clients
The sudden collapse of Ueno Bank left millions of customers without access to their personal savings accounts. Authorities are currently struggling to determine the fate of the substantial public resources deposited by the government. Meanwhile, Miguel Vázquez and other key bank executives were arrested following raids on their private residences in Asunción.
8Broader Economic Consequences
The Ueno Bank scandal represents a major systemic failure in Paraguay's financial sector, exposing vulnerabilities in regulatory oversight and government fund management. As investigations continue, the case serves as a stark reminder of the risks associated with mixing public policy with private corporate interests, potentially reshaping the nation's future approach to banking regulation.
Original article: El Financiero — Santiago Peña Resigns Amidst Ueno Bank Financial Collapse Scandal