Asunción, November 7, 2026: Paraguay has entered a major political crisis after President Santiago Peña was removed from office through impeachment following the collapse of digital lender Ueno Bank. Former Vice President Pedro Alliana was sworn in as the country’s new president on Friday, November 6, while Peña was placed under house arrest amid an investigation into alleged financial misconduct.
The banking crisis has left millions of customers struggling to access their savings, triggered nationwide protests and raised serious questions about political influence over financial regulators.
Paraguay’s Senate Votes to Remove President Peña
Paraguay’s Senate voted overwhelmingly to remove Santiago Peña from office on November 6.
According to AFP, 44 senators voted in favour of impeachment, with one lawmaker absent.
The proceedings followed allegations that Peña had improper connections with Ueno Bank and that his administration failed to ensure effective regulatory oversight.
Senate President Basilio Núñez announced the decision after lawmakers concluded that Peña had failed to fulfil his official responsibilities.
Peña has denied wrongdoing.
Pedro Alliana Sworn In as New President
Following Peña’s removal, former Vice President Pedro Alliana took the presidential oath.
Alliana will serve the remainder of the presidential term, scheduled to end in August 2028.
He immediately faces the challenge of restoring public confidence in Paraguay’s banking system.
The new president has promised to support affected depositors and address the financial disruption caused by Ueno Bank’s collapse.
His administration will also face scrutiny over the handling of the crisis.
Santiago Peña Placed Under House Arrest
Shortly after his impeachment, authorities placed former President Peña under house arrest.
Prosecutors are investigating allegations involving influence peddling, misuse of public funds and other possible financial offences.
Investigators are examining whether political connections influenced the treatment of Ueno Bank by financial regulators.
The investigation is ongoing, and Peña has not been convicted of the alleged offences.
Ueno Bank Collapse Triggers Nationwide Crisis
The political turmoil began after Paraguay’s central bank intervened in Ueno Bank over serious financial concerns.
Regulators identified problems involving the bank’s solvency, lending practices and internal financial arrangements.
Ueno had grown rapidly into one of Paraguay’s major digital banking providers.
Its suspension left a substantial number of customers unable to access their accounts or complete everyday transactions.
The disruption affected individuals, businesses and pensioners who relied on the lender.
Nearly Three Million Customers Affected
Reports indicate that Ueno Bank had approximately 2.9 million customers before the crisis.
The suspension of banking services left many people struggling to withdraw savings, receive payments or make purchases.
The disruption contributed to widespread public anger.
Demonstrators gathered outside government buildings and demanded accountability from political leaders and financial regulators.
Some protests resulted in confrontations with police.
Former President’s Financial Links Under Investigation
The investigation has focused partly on Peña’s previous financial relationship with a company connected to Ueno Bank.
According to international reporting, Peña previously held shares in a business associated with the bank’s ownership structure.
He reportedly disposed of those holdings in 2025.
Investigators are examining whether any conflicts of interest existed during his presidency.
Peña has rejected allegations that he improperly influenced financial decisions for personal benefit.
Public Funds and Pension Investments Face Scrutiny
Ueno Bank’s financial operations included substantial deposits involving public institutions and pension funds.
Reports indicate that approximately $800 million to $860 million in public and pension-related funds were connected to the bank.
Authorities are investigating whether these funds were managed appropriately and whether regulatory safeguards were followed.
The controversy has raised questions about the relationship between political officials, banking executives and financial oversight institutions.
The ultimate extent of any losses remains subject to investigation.
Former Central Bank Chief Also Faces Investigation
The crisis has extended to Paraguay’s financial regulatory leadership.
Former central bank official Carlos Carvallo, who previously held a senior position at Ueno, has come under investigation.
Authorities have examined decisions made during the period when the bank expanded its operations.
Several former Ueno executives have also faced legal proceedings.
These investigations are separate from the impeachment process and remain subject to judicial determination.
Government Begins Returning Depositors’ Money
Paraguayan authorities have started releasing funds to certain affected depositors.
The central bank’s deposit guarantee arrangements are expected to protect the full balances of a substantial majority of customers.
Officials have indicated that approximately 97% of depositors fall within the applicable insurance coverage.
Initial repayments have prioritised eligible customers meeting specified conditions.
However, the banking disruption has not been fully resolved, and many customers continue to await access to their money.
Banking Crisis Sparks Political Uncertainty
Peña’s impeachment has also exposed political divisions within Paraguay’s governing Colorado Party.
As public anger intensified, the former president lost support among sections of his political allies.
Lawmakers pursued impeachment even after Peña offered to resign.
The rapid transition to Alliana’s presidency has raised questions about political stability and the future direction of economic policy.
New President Faces Major Challenges
Pedro Alliana inherits a government confronting a serious banking crisis and a loss of public confidence.
His immediate priorities include restoring access to deposits, supporting financial stability and ensuring that investigations proceed through the appropriate legal process.
He must also manage public expectations while addressing questions about his administration’s own relationship with the banking sector.
International observers will be watching how Paraguay responds to the crisis.
Paraguay Seeks Stability After Historic Impeachment
The removal of Santiago Peña marks a significant development in Paraguay’s political history.
The combination of a major bank collapse, criminal investigations, mass protests and presidential impeachment has created a period of uncertainty.
Although Pedro Alliana has assumed office, the financial and legal consequences of Ueno Bank’s collapse remain unresolved.
As investigations continue, the government’s ability to protect depositors and restore confidence in financial institutions will be central to Paraguay’s recovery.
Source: Reuters, Associated Press, AFP — November 6–7, 2026
Supreme News Network
