Paraguay’s president stepped down on Thursday after the central bank seized Ueno Bank. Protests and impeachment debate mounted.
Paraguayan President Santiago Peña resigned Thursday, Nov. 5, days after the country’s central bank seized Ueno Bank, a major digital lender with close ties to his government, The Associated Press reported. In a video posted on X, Peña said he was stepping down to preserve stability and democratic institutions as protests in Asunción entered a third day and lawmakers debated his impeachment.
“I have made the decision to submit my resignation as president of the republic,” Peña said. He apologized to Paraguayans for any failure but stopped short of accepting responsibility for the crisis, and said his priority was ensuring depositors recover their savings. AP reported that Peña was once an investor in a company related to Ueno Bank and held a stake in its holding company until last year.
The central bank said regulators examining Ueno’s loans to companies linked to its owners found poorly documented lending and expenses wrongly counted as assets. Once the books were corrected, Ueno’s capital fell to less than half the legal minimum, the bank said. The lender was seized Tuesday, and officials said accounts and remaining assets would be moved to other banks before the rest is liquidated. Officials said they had opened new accounts for about 280,000 people who banked only with Ueno. Interim central bank president Pedro Acosta Bernal, appointed Wednesday after Carlos Carvallo resigned at Peña’s request, said the banking system is sound.
Ueno held roughly US$800 million in public deposits as of last month, about a quarter of its total, including money from the state pension and health fund, AP reported. Citing the Paraguayan newspaper ABC Color, AP said central bank inspectors found in June a pattern of lending to insiders beyond what the law allows. Peña had defended the bank and its oversight as recently as last month, dismissing the concerns as a smear campaign, according to AP.
Authorities have detained eight senior Ueno executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale, and prosecutors have charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud, AP reported. Lawyers for several of those detained said they needed time to review the allegations. Riot police fired pepper spray and rubber pellets at demonstrators in Asunción on Wednesday, AP said. On Thursday, hundreds of employees of Ueno and its parent group, Grupo Vázquez, protested outside the Labor Ministry demanding severance and unpaid wages.
The Associated Press