The collapse of Ueno Bank has evolved into one of the most significant financial and political scandals in Paraguay’s history. At its center are allegations of severe banking irregularities, hundreds of millions of dollars in missing public funds, and deep business ties linking the institution to President Santiago Peña.
The crisis erupted on November 3, when Paraguay’s Central Bank (BCP) initiated resolution proceedings against Ueno after determining it had breached minimum solvency requirements. The public prosecutor’s office has since launched three separate investigations into suspected financial crimes, resulting in formal charges against 27 individuals.
Pressure on President Peña mounted rapidly. On November 5, he tendered his resignation, but Congress declined to accept it. Instead, the Chamber of Deputies voted unanimously to impeach him. A subsequent joint session of both legislative chambers convened to consider the resignation but failed to reach a quorum, leaving no decision rendered. Peña remains in office for now, while the Senate has formally opened impeachment proceedings.
What is Ueno Bank, and what happened?
Ueno Bank is a Paraguayan digital lender owned by Grupo Vázquez, a major national conglomerate. Launched in 2021, it expanded at a remarkable pace, recently amassing roughly three million customers—nearly half the country’s population. Concurrently, warnings emerged that the bank may have extended excessive loans to companies affiliated with its owners.
On November 3, 2026, the Central Bank intervened after determining Ueno had violated minimum solvency rules, meaning it lacked sufficient capital to cover its incurred risks. Business operations were suspended abruptly, leaving millions of account holders unable to access their funds.
What caused the crisis?
Investigators are focusing on three primary areas of concern.
First, Ueno Bank is suspected of extending credit to other Grupo Vázquez entities beyond legal limits.
Second, certain transactions may have been structured to conceal capital shortfalls, painting a healthier financial picture than reality warranted.
Third, scrutiny has fallen on the Central Bank itself regarding why it did not intervene sooner despite apparent warning signs of instability.
How much public money is managed by Ueno Bank?
Ueno Bank held vast deposits of state funds. Its most significant institutional investor was the Instituto de Previsión Social (IPS), Paraguay’s social security agency responsible for pensions and welfare payments. According to media reports, the bank administered public funds totaling between $800 million and $850 million.
The sheer volume is alarming, but so is the concentration of public assets in a single institution—one that ultimately required state intervention. Reports indicate other state entities continued depositing funds with the bank even as risks mounted.
This raises serious questions about the investment protocols of state institutions and the exposure of public savings to undue risk.
What are the bank’s connections to Santiago Peña?
The President maintained a business relationship with Grupo Vázquez, Ueno’s parent company, until March 2025—well after his election as head of state. Peña denies any direct involvement with the bank’s operations.
However, Peña’s 2023 appointment of Carlos Carvallo as Central Bank president has drawn intense scrutiny. Until that appointment, Carvallo chaired the finance company that became Ueno Bank, Financiero Ueno. The move raises significant conflict-of-interest concerns regarding the independence of banking supervision.
Carvallo resigned on November 3 at Peña’s request.
Who else is under suspicion?
On November 4, the prosecutor’s office formally charged 27 people: eight Ueno Bank executives and 19 individuals linked to companies associated with the bank.
The investigations center on suspected breach of trust, attempted fraud, dereliction of duty during a crisis, and violation of record-keeping obligations.
On November 5, a judge ordered several former executives into pre-trial detention, including Federico Miguel Vázquez Villasanti, president of Grupo Vázquez. Two other defendants were placed under house arrest.
What will happen now?
The Central Bank has initiated liquidation proceedings against Ueno Bank. Deposits up to the equivalent of $37,600 per customer are protected by law. Emergency legislation has also been passed to allow early payouts of approximately $20,000 per saver. However, it remains unclear when customers will actually recover their funds, or what fate awaits deposits exceeding the legally protected threshold.
The political outlook is equally complex. Although Peña offered his resignation, he remains in office after the joint congressional session failed to achieve a quorum. The Senate has now launched impeachment proceedings on charges of serious malfeasance. Peña has vowed to contest the proceedings and exercise his right to a defense.
The stakes center on political immunity. If Peña resigns conventionally, he automatically becomes a senator for life, granting him parliamentary immunity from prosecution. If impeached and removed, he loses that protection and becomes vulnerable to criminal charges.
Should Peña leave office, the constitution mandates that Vice President Pedro Alliana assume the presidency. Congress would then be tasked with electing a new vice president. The current presidential term runs until August 2028.
