Over the past week, a crisis that began at a bank ended with the departure of Paraguay’s president. What seemed like a financial problem became a debate about oversight, conflicts of interest, and the trust of millions of people in the system. Here is the timeline, with what is known so far and what is still unclear.
What It Means for a Bank to Be Taken Over
According to El Observador CR, the Central Bank of Paraguay intervened in Ueno Bank on Tuesday, November 3, due to insufficient capital. El Mundo CR describes a resolution procedure started that same day, prompted by the deterioration of the entity’s financial indicators. According to the authorities cited by El Mundo CR, the solvency ratio fell below 50% of the legally required minimum.
Put simply, solvency is a bank’s capacity to meet its obligations with the capital it holds. When that cushion shrinks too much, the regulator can require the institution to reorganize or shut down. For customers, the immediate effect is that access to accounts, cards, and apps can be interrupted, as happened here. That is why the measure carries such a high social cost, even though it is technical in nature.
The Political Knot: Ties and Conflict of Interest
The scandal became political because of the president’s business background. According to El Mundo CR, Peña held a shareholding in Ueno Holding, which is linked to the bank, until March 2025. The same source notes that Carlos Carvallo, who headed the Central Bank, had previously led Ueno Bank.
It is worth separating two things here. A conflict of interest arises when a person with decision-making power has personal interests that could influence that decision. This is what the opposition is questioning, according to El Observador CR. However, as El Mundo CR points out, the existence of these ties does not by itself prove criminal responsibility for the irregularities under investigation. These are two distinct levels: one political and ethical, the other judicial, which requires evidence.
From the Impeachment Request to the Resignation
Impeachment is a constitutional mechanism for removing senior officials from office. According to El Mundo CR, a group of 35 lawmakers presented a motion against Peña and Vice President Pedro Alliana over alleged conflicts of interest, the handling of pension funds, and oversight failures. The same source indicates that the process could have ended in removal if it obtained the necessary votes.
The turning point came when, according to El Observador CR, the Colorado Party announced it would support the removal request. Peña announced his resignation on Thursday, November 5, in a video posted on his X account, in which he apologized to the public and spoke of the “peace of mind” of those who entrusted their savings to the system. According to El Mundo CR, the resignation came while Congress was still discussing the procedure.
What Changes for the Government and Savers
According to El Mundo CR and El Observador CR, the Constitution establishes that, if the president leaves office permanently, the vice president takes over. The presidency therefore passes to Pedro Alliana, who was also among those named in the impeachment motion. Peña had taken office in 2023 with a mandate running until 2028, according to El Observador CR.
Sources of the News
- El Mundo CR: ¿Por qué renunció el presidente de Paraguay?
- El Observador CR: Presidente de Paraguay Santiago Peña renuncia en medio de crisis bancaria
- Delfino.cr: Renuncia el presidente de Paraguay en medio de escándalo bancario
- Infobae América: Crisis política en Paraguay EN VIVO | El Congreso debate el juicio político a Peña y el Partido Colorado le pidió la renuncia
- France 24 (español): Tensión en Paraguay: el presidente Santiago Peña, ad portas de un juicio político