Paraguay's Senate voted 44 to 0, with one abstention, to remove President Santiago Peña from office on November 6, 2026, after the collapse of Ueno Bank left nearly three million customers unable to access their savings [2][3][5]. Minutes after the vote, prosecutors ordered Peña placed under house arrest on suspicion of breach of trust and influence peddling [1][3][6][8][33]. Vice President Pedro Alliana was sworn in as Paraguay's 53rd president the same evening, promising that those affected by the financial collapse would be "fully compensated" [2][3][10].
The impeachment followed events set in motion on November 3, when Paraguay's central bank put Ueno Bank into resolution after its solvency ratio fell below half the legal minimum [16][27]. Ueno, a digital lender that had grown within three years to serve roughly three million customers — nearly half the country's population — held between $800 million and $850 million in public-sector deposits, including approximately $380 million from the state pension and health fund [2][9][16][27][32], though the Social Security Institute's financial manager, Gladys Vera, put its exposure at $355 million, about 9% of its investments [17]. The bank's closure froze accounts, blocked card transactions, and halted pension payments for 32,000 Instituto de Previsión Social pensioners [16][17][28].
Legislators, prosecutors, and commentators who supported the removal framed it as accountability for what opposition Senator Rafael Filizzola called "the biggest fraud carried out from political power in the democratic era" — a bank, he said, "created from political power, to use public money for private businesses linked to political power, with the president of the republic at the head of it" [3][21]. Accusing deputies alleged a $1.2 billion loss and called Peña "el desfalcador más grande de la historia" (the biggest embezzler in history) [29]. Senator Adrián Vaesken accused Peña of "permis, toléré et ne pas avoir corrigé un détournement de fonds des retraites vers une banque liée au cercle présidentiel" (permitting, tolerating, and failing to correct a diversion of pension funds to a bank linked to the presidential circle) [12]. Sociologist Luis Ortiz of the National University of Asunción said Peña had enacted laws and measures that ultimately benefited Ueno's owners, directors, and shareholders [24].
The decision to impeach rather than accept Peña's resignation was central to the accountability argument. Peña submitted his resignation on November 5, but the Chamber of Deputies voted 78 to 0 to proceed with impeachment, and a joint session on the resignation collapsed when Colorado Party legislators withdrew, leaving the chamber without quorum [19][27][28]. By impeaching rather than accepting the resignation, senators stripped Peña of the lifetime Senate seat and immunity that would have attached to a former president [5][14][24]. Academic Myrian Gonzalez of Paraguay's National University said that removal through a political trial would leave Peña accountable in ordinary courts, "in a similar situation to any other citizen" [24]. Activist María Stela Invernizzi stated: "Nosotros no queremos que se acepte su renuncia, porque si se acepta, él quedaría blindado como senador vitalicio" (We do not want his resignation accepted, because if it is, he would be shielded as a lifetime senator) [37].
Peña's defence lawyers, Ricardo Preda and Adolfo Ferreiro, argued that the impeachment was procedurally void because Peña had already tendered his resignation, and that Parliament "n'a pas compétence pour juger une personne qui a décidé de renoncer à sa charge" (lacks jurisdiction to judge a person who has decided to renounce his office) [7][12]. Preda described the allegations as a "reckless accusation" [3]. Peña himself requested a 72-hour extension to prepare his defence, arguing that being served a 15-page accusatory writ with 300 pages of appendices at 22:15, with less than twelve hours to respond, "is not due process" [16][19][31]. The Senate rejected the request [23]. Independent lawyer Theodore Stimson contended that impeachment only judges an official in office, so a valid resignation removes its object [39], while lawyer Ezequiel Santagada argued the opposition was "playing into the Colorado Party's hands" by prolonging the process [39].
Peña denied any improper ties to Ueno Bank and apologised without admitting fault. He had held a roughly $1 million stake in Ueno's parent company until early 2025 [2][9]. "I want to apologize to the people if I have failed them at any point. It was never my intention to betray the trust they placed in me," he said [3][31]. He dismissed criticism as a "campaña mediática mezquina y mentirosa" (petty and dishonest media campaign) and characterised the bank's failure as a regulatory issue [18][4]. The Central Bank of Paraguay denied any conflict of interest in its oversight, saying former chief Carlos Carvallo had recused himself from all decisions related to Ueno [4]. Carvallo, whom Peña had appointed to head the central bank after he previously chaired Ueno's predecessor finance company, resigned on November 3 at Peña's request and faces an arrest warrant [9][27][14].
Depositors, pensioners, and small entrepreneurs described losing life savings, business capital, and pension payments. Retired protester Marcelino Vergara said: "Perdí los ahorros de toda mi vida, solo tengo 8.000 guaraníes... Todos deben ir presos" (I lost my life savings, I only have 8,000 guaraníes... Everyone must go to prison) [40]. State electricity company employee Yinal López called the collapse "una lesión de confianza muy grande" (a huge breach of trust) and said the president had mocked the people [6]. Protester Luis Pineda accused Peña and the Colorado Party of stealing "all our savings" [16]. Demonstrations continued for consecutive nights across Paraguay, with hundreds gathering outside Peña's home demanding his transfer to prison; some protesters threw stones and police responded with tear gas [15][28]. Verisk Maplecroft analyst Mariano Machado said protests would intensify if Peña's exit appeared to grant him impunity or if payouts stalled [4].
The incoming government and financial authorities projected control over the crisis. Alliana ordered immediate action to compensate savers, with priority for "los menos favorecidos" (the least favoured) [10][20]. Congress rushed through a law creating a state-guaranteed fund to repay depositors within five business days, starting with small accounts [16]. José Maciel, administrative director of the BCP deposit guarantee fund, said the process of paying guarantee advances to Ueno depositors had begun on Thursday [12][33]. The deposit-insurance scheme covers up to $36,000 per customer, estimated to cover 97% of balances [16].
Opposition voices contended that the succession changed nothing. Senator Filizzola called Alliana "otro personaje cómplice de lo ocurrido, que responde a los intereses de su mentor y padrino Horacio Cartes" (another accomplice in what happened, who answers to the interests of his mentor and sponsor Horacio Cartes), while saying the opposition accepted the situation to give institutional continuity [7]. Alliana himself remains under investigation in the Ueno case, and the Chamber of Deputies rejected an opposition attempt to open impeachment hearings against him by 48 to 30 [6][41]. Former President Horacio Cartes, the Colorado Party powerbroker who had sponsored both Peña and Alliana, split with Peña and endorsed impeachment, stating: "We will not stand on the side of the theft of public, private and pensioners' funds" [2][7][13][21][30].
The economic fallout extended beyond depositors. The Importers and Traders Association warned of an immediate 35% collapse in sales at the country's largest stores [46]. The guaraní depreciated 8.8% against the dollar over the week, and country risk jumped 23% [19]. Stalled IDB and Taiwan loans, bond losses, and the closure of a ride-hailing app compounded the disruption [6]. Economist Alexandre Barros da Costa estimated the crisis could affect tens of thousands of Brazilians living and doing business in Paraguay [40], while Giuliana Garcete, executive manager of the Brazilian Chamber of Entrepreneurs in Paraguay, called the case isolated and said established industrial firms were largely unaffected [42].
Foreign governments treated the crisis as Paraguay's internal constitutional matter. Brazil's President Luiz Inácio Lula da Silva congratulated Alliana and invited him to Brasilia to strengthen bilateral relations [8], while Brazil's foreign ministry, Itamaraty, declined to issue an official statement [36]. Taiwan's Ministry of Foreign Affairs said the leadership change would not affect diplomatic ties or cooperative projects [31][44]. The United States expressed solidarity with the Paraguayan people without commenting on the accusations, urging authorities to "maintain the peace" [38]. Bolivia's President Rodrigo Paz Pereira stressed that "el respeto a la Constitución y la institucionalidad deben prevalecer ante todo" (respect for the Constitution and institutions must prevail above all) [36]. A US foreign-policy outlet framed Peña's fall as a rupture in Washington's regional posture, noting recent US-Paraguay security, energy, and mining deals and a lobbying campaign that had previously lifted US sanctions on Cartes [13].
Prosecutor Silvia Margarita Gonzalez Vester was scheduled to question Peña on Saturday over breach of trust, influence peddling, and misappropriation of funds [3][11][12]. Attorney General Emiliano Rolon Fernandez ordered three criminal investigations covering banking supervision, the handling of Ueno's collapse, and the placement of public deposits [16][32]. Prosecutors have charged 27 people, including eight Ueno Bank executives, with lead shareholder Miguel Vazquez ordered held in pretrial detention [5][22][27].