Reported by The Guardian
Santiago Peña’s rightwing administration had authorised Ueno Bank to drastically expand operations before collapse
Paraguay’s rightwing president, Santiago Peña, resigned on Thursday after a political and financial crisis collapsed the South American country’s banking system in recent days.
At the centre of the crisis is Ueno Bank, which in just a few years under Peña went from an obscure digital bank to one of the country’s largest lenders, claiming to have about 60% of Paraguay’s adult population as customers.
More from the original report
Last Monday, the central bank ordered Ueno into resolution over insolvency, freezing the deposits of 3 million customers, leaving hundreds of thousands of families without access to money for food and basic daily expenses. Bank executives were arrested, and people took to the streets in massive protests.
In power since August 2023 and with a term running until 2028, the 47-year-old economist was already facing impeachment proceedings that had broad support.
“Dear compatriots, today I address you at one of the most difficult moments of my life. With my heart set on Paraguay and with the conviction that our republic must always come before any person or circumstance, I have decided to submit my resignation as president of the republic,” said Peña in a video.
Thousands of Paraguayans gathered outside Congress on Thursday to protest against Peña. Lawmakers voted unanimously on Thursday to launch impeachment proceedings against Peña over the crisis, alleging misconduct and a conflict of interest in dealings with the bank to which he is tied.
Ueno Bank began as a finance company in the 1970s and, in 2021, was bought by Grupo Vázquez, one of Paraguay’s largest business and industrial conglomerates. At the end of 2023, it received authorisation from the central bank, already under Peña’s administration, to operate as a digital bank.
The bank rapidly expanded its operations, attracting customers with generous cash-back offers on groceries and sponsoring Paraguay’s national football team. On Wednesday, the players released a letter “demanding” a “forceful response” from the government and the justice system.
The bank came to manage between $800m and $850m in deposits from state and pension entities, including…