Paraguay financial institution collapse topples president, locks out tens of millions : NPR
Protesters maintain indicators exterior Congress in Asunción, Paraguay, on Friday, Nov. 6, 2026. The Senate impeached and eliminated President Santiago Peña over allegations linked to the collapse of Ueno Financial institution. Vice President Pedro Alliana was sworn in as his successor.
Jorge Saenz/AP
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Jorge Saenz/AP
ASUNCIÓN, Paraguay — When Ueno Financial institution’s providers abruptly stopped working within the early hours of Tuesday morning, the results have been rapid for the tens of millions of Paraguayans who had come to rely upon it for on a regular basis transactions.
“Individuals have no belief,” stated Elizabeth González, a 28-year-old barista at a café in downtown Asunción, just a few blocks from Paraguay’s Congress constructing, the place protesters had begun gathering after the financial institution’s collapse was introduced Tuesday.
Earlier, one buyer had walked into the café and insisted on paying in money. He not trusted any financial institution.
“If Paraguayans themselves aren’t assured proper now, international traders might be much less so,” González stated.
The collapse affected way over the financial institution’s shareholders. Ueno stated it had 2.9 million prospects — round 60% of Paraguay’s grownup inhabitants. The Central Financial institution stated the financial institution had roughly 1.8 million depositors.
By Saturday, authorities stated nearly 1.2 million prospects had obtained an advance fee beneath the state’s deposit assure fund, however many have been nonetheless ready.
A shuttered Ueno Financial institution ATM in Asunción, Paraguay, after the financial institution’s collapse left tens of millions of consumers unable to entry their cash and disrupted on a regular basis transactions throughout the nation.
Charles Parkinson for NPR
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Charles Parkinson for NPR
It additionally led to the impeachment and removing of President Santiago Peña, a detailed ally of President Donald Trump, and uncovered an influence wrestle inside inside the ruling Colorado Social gathering.
The anger was palpable exterior Congress on Friday, the place a whole bunch had gathered to protest not solely their incapability to entry their cash but additionally what they noticed as a broader failure of accountability.
“I got here not as a result of it impacts me personally, however as a result of it impacts all of Paraguay,” stated Elodia Saveredo, a 71-year-old housewife who sells her personal handicrafts on-line.
Batarram Caballero, a 23-year-old fifth-year biochemistry scholar and president of the coed heart on the Nationwide College of Asunción, stated classmates had cash frozen that they wanted to cowl fundamental bills.
“It wasn’t some huge cash, maybe, nevertheless it was cash for his or her bus fare. It was cash for his or her meals,” she stated. “To listen to that and never have the ability to do something as a result of I haven’t got the sources to assist them could be very discouraging.”
Ueno Financial institution launched as a fintech in 2021 and commenced working as a financial institution in November 2023. Its meteoric rise to change into one of many nation’s most vital monetary establishments was pushed by slick advertising and marketing and a digital mannequin based mostly round comfort and cashback offers; prospects might open accounts on their telephones and have been provided incentives to course of funds by means of the platform.
Caballero believes the disaster was foretold by an intense marketing campaign within the days earlier than accounts have been frozen.
“They have been bombarding us with messages telling us to place our cash there,” she stated. “There have been additionally rumors about what was already on the playing cards.”
Demonstrators burn a flag depicting impeached Paraguayan President Santiago Peña throughout a protest over the banking disaster exterior the Nationwide Congress in Asunción on Nov. 6, 2026.
Jose Bogado/AFP
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Jose Bogado/AFP
The financial institution additionally held substantial public funds. The Social Safety Institute, generally known as IPS, had round $355 million invested in Ueno, roughly 9% of its portfolio.
The sums concerned have raised questions on how such a younger financial institution got here to carry a lot public cash.
Manuel Ferreira, an economist and former finance minister, informed native outlet ABC Colour that the collapse raised elementary questions on how the financial institution managed its belongings. He identified that, in a typical financial institution, shareholders present solely a small portion of the cash behind its belongings, whereas the majority comes from buyer deposits.
He additionally argued that advertising and marketing and reductions helped entice prospects however didn’t create lasting belongings. A financial institution’s principal asset, he stated, was its mortgage portfolio: cash owed by debtors.
However within the case of Ueno, lots of these loans had gone to corporations immediately linked to the financial institution’s controlling house owners, Grupo Vásquez, together with $146 million in loans made to simply three corporations. He described Ueno’s promissory notes as being signed by the identical individuals on either side of some transactions.
The scandal hit Peña significantly laborious due to his private hyperlinks to the financial institution’s holding firm, wherein he held shares even after taking over the presidency. He additionally appointed Carlos Carvallo, who had led Ueno Financial institution, to go Paraguay’s Central Financial institution in 2023.
In his asset declaration submitted weeks after taking over the presidency in 2023, Peña listed shares in Ueno Holding, then valued at round $845,000. These shares represented round 1.6% of the corporate’s paid-up capital when he later offered them in March 2025.
Paraguayan President Santiago Peña indicators his resignation letter on the presidential residence in Asunción on Nov. 5, 2026, days after the Central Financial institution took over Ueno Financial institution amid a solvency disaster that left tens of millions of consumers unable to entry their financial savings.
Laura Fioravanti/AP
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Laura Fioravanti/AP
Prosecutors allege that, whereas president, he used his place to affect public businesses and state-owned entities to keep up deposits with the financial institution regardless of his connections to its mum or dad group.
Peña resigned Thursday and was impeached and faraway from workplace Friday. The next day, prosecutors charged him with breach of belief and administration for private achieve. He was ordered held in pretrial detention at a army facility pending the investigation. Peña has pleaded not responsible. Pedro Alliana, the nation’s vice chairman, has been sworn in as president to serve out the remainder of Peña’s time period till August 2028.
Carvallo was additionally arrested and charged with breach of belief, administration for private achieve and producing false public paperwork. A decide ordered him held in pretrial detention at a police facility. Eight Ueno executives, together with 36-year-old CEO Miguel Vásquez, have been additionally arrested and charged.
The disaster has additionally put the highlight on Horacio Cartes, a tobacco magnate and former president of Paraguay who wields appreciable political and financial affect.
Cartes handpicked Peña, his former finance minister, to steer his Honor Colorado faction into the 2023 presidential election. However the relationship between the 2 males had change into more and more strained, apparently over Peña’s efforts to determine his personal energy base inside the occasion.
In September, senators aligned with Cartes sought info from the Central Financial institution about Ueno’s transactions with associated corporations and its public-sector deposits.
After the financial institution collapsed, Cartes publicly distanced himself from Peña, releasing a public assertion on Wednesday calling for an investigation and insisting there needs to be “no impunity for anybody.” The next day, his faction backed Peña’s impeachment.
The transfer was broadly seen as a decisive withdrawal of political safety for Peña, and a possibility for Cartes to reassert his affect.
Demonstrators burn Ueno Financial institution playing cards throughout a protest after Paraguay’s central financial institution took over the financial institution amid a solvency disaster in Asunción, Paraguay, Nov. 5, 2026.
Jorge Saenz/AP
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Jorge Saenz/AP
However for these gathered exterior Congress protesting, the scandal was about greater than a financial institution collapse. It was a reckoning with Paraguay’s political institution.
For Rodrigo Piatti, a 45-year-old activist with the anti-corruption marketing campaign group Comisión Escrache Ciudadano, the scandal would solely result in actual change if the political institution, together with Cartes, have been challenged.
“All the things that is improper with Paraguay… is Horacio Cartes and his line of succession,” Piatti stated. “[Paraguay needs] the opposition to take energy. An actual opposition to take energy, and for all these criminals to be put in jail. That is the dream of all Paraguayans.”
The disaster has additionally raised questions on Paraguay’s picture amongst international businesspeople. Eduardo López, a 35-year-old exporter whose firm operates in Paraguay and america, stated the scandal would solely worsen the insecurity he had already seen amongst American enterprise contacts.
“We’re a severe Paraguayan firm, however [American businesspeople] do not belief the Paraguayan authorities,” he stated. “It is a catastrophe.”
Close by, Lizza Lugo, a 22-year-old scholar chief on the Nationwide College, expressed frustration with the established order and stated she hoped voters would convey change within the 2028 presidential election.
“The legal guidelines apply in a different way to those that have cash and people who do not. That’s the actuality in Paraguay,” she stated. “I do hope individuals haven’t got quick reminiscences, as a result of they neglect this stuff in a short time.”
