Paraguay's President Peña resigns over Ueno Bank collapse

Paraguayan President Santiago Peña resigned on Thursday, brought down by the collapse of digital lender ueno, a bank failure that has left roughly 3 million customers — in a country of 6.5 million people — locked out of their accounts and driven Paraguay into what Euronews describes as its worst institutional crisis in years.

Peña, an ally of US President Donald Trump, announced his departure in a recorded video address after the opposition called an extraordinary session of Congress to file an impeachment motion and protesters demanded he go. "I do so with the stability of our country, social peace and the need to preserve our democratic institutions in mind," he said, according to Al Jazeera. Earlier on Thursday, members of his own conservative party withdrew their backing.

The mechanics of the fall are stark. Ueno grew quickly from a niche fintech player into a mid-tier bank administering close to $850 million in public funds. Paraguay's central bank then intervened after determining it had breached minimum solvency requirements — the buffer of capital that lets a bank honour withdrawals. When that buffer is gone, depositors cannot get their money out.

Lawmakers accused Peña of conflicts of interest, misuse of pension funds and institutional cover-ups linked to the collapse. Al Jazeera's Latin America editor Lucia Newman said he stands accused "of negligence at the very least and complicity in covering up the fact that the bank was insolvent". She reported that crowds outside Congress were urging lawmakers not to accept the resignation, demanding instead that Peña be tried and impeached. Ueno itself has made no public statement.

Vice President Pedro Alliana is set to take office as Peña's replacement, according to the South China Morning Post. He inherits a crisis that is at once political and financial: nearly half the country's population locked out of accounts, and public funds tied up in a failed lender.

Peña used his farewell to press for depositors to be made whole, saying his "greatest wish" was that the deposit guarantee fund "fulfill its purpose" and that public funds "be protected". Whether that fund is large enough to cover the losses — and how quickly customers regain access — is the question that now decides how hard this hits Paraguayan households. Congress's session and the first moves of the Alliana government on the deposit guarantee will be the next tests.