Paraguay has a new president after its Senate voted overwhelmingly to remove Santiago Peña from office over the collapse of a bank that locked nearly half the country’s population out of their savings.
Key Points
- The Senate voted 44–0 on Friday to remove President Santiago Peña from office.
- Pedro Alliana Paraguay president — the 52-year-old vice president was sworn in the same day and will serve until August 2028.
- Peña was placed under house arrest and faces charges including breach of trust and embezzlement.
- The collapse of Ueno Bank left about 3 million people unable to access their accounts, salaries and pensions.
The crisis erupted on Tuesday, when Paraguay’s central bank announced that Ueno Bank had fallen below the legal standards for solvency and seized the lender, transferring its remaining assets to other banks as a safeguard. Millions of clients abruptly lost access to their money, including 32,000 retirees who received their pensions through the bank. Some $355 million in state pension funds had been invested in Ueno, and at least 27 people now face criminal charges in the scandal, including lead shareholder Miguel Vazquez.
Peña announced his resignation on Thursday, apologising to Paraguayans and saying he had never intended to betray their trust. But lawmakers proceeded with impeachment anyway. The Chamber of Deputies voted 78–0 to impeach him, and the Senate followed on Friday, with all 44 senators present voting for removal. One senator was absent.
Questions over the president’s links to the bank
Prosecutors have questioned whether Ueno was shielded from accountability because of its government connections. Peña had been a business partner in the group that owned the lender until March 2025, and lawmakers accused him of misconduct and a conflict of interest over the bank’s supervision. He has denied wrongdoing.
Minutes after the Senate vote, prosecutors ordered Peña placed under house arrest. He appeared before prosecutors in Asunción on Saturday for questioning on charges of breach of trust, influence peddling and embezzlement of public funds, the most serious of which carry up to 10 years in prison. The fallout has already forced the resignation of Paraguay’s central bank chief.
What happens next
Alliana, who will serve the remainder of Peña’s term through 15 August 2028, promised in his first address to compensate those affected by the bank’s collapse. But his appointment has drawn criticism from demonstrators because he belongs to the same governing Colorado Party as Peña, and he has reportedly been named in investigations involving Ueno Bank himself. The Chamber of Deputies declined to open impeachment hearings against him, leaving his path to the presidency open.
Peña is the second Paraguayan president ousted by impeachment since the end of General Alfredo Stroessner’s 35-year dictatorship in 1989. Whether Alliana can restore confidence in the banking system — and in the government that supervised it — will define the rest of his term.
For background on how the crisis began, see our report on Peña resigning as the Ueno Bank collapse froze millions of accounts, and on Ecuador’s former president convicted of bribery. More in our World News section.
Sources: Al Jazeera, “Paraguay’s Santiago Peña under arrest, new president Pedro Alliana sworn in“; Reuters, “Who is Paraguay’s new president Pedro Alliana?“.