The collapse of Ueno Bank has locked more than 1 million savers out of their accounts, forcing lawmakers to approve emergency legislation to accelerate deposit insurance payouts. Santiago Peña offered his resignation after the lower house voted unanimously for his impeachment, but a Senate session to address his departure collapsed when lawmakers walked out. Authorities have arrested the bank's controlling shareholder following a raid on his home, while the director of the central bank has stepped down. The rapid political unraveling poses a significant setback for the Trump administration, which had recently celebrated Peña's government as a key regional partner.
Key points
The sudden insolvency has locked out more than 1 million account holders and prompted the…: The sudden insolvency has locked out more than 1 million account holders and prompted the arrest of controlling shareholder Miguel Vázquez.
The political crisis undermines U.S. regional diplomacy just weeks after the Paraguayan l…: The political crisis undermines U.S. regional diplomacy just weeks after the Paraguayan leader was hosted by Treasury Secretary Scott Bessent in Washington.
President Peña offered his resignation but is scheduled to present his defense to the Sen…: President Peña offered his resignation but is scheduled to present his defense to the Senate after an initial session abruptly collapsed.
Sources checked by our analysis pipeline: 1
The sleek office building in Asuncion, dubbed “The Matrix,” was overcrowded with young employees. The glass panels, polished wood and fancy art seemed better suited to a cash-rich startup than a business that catered to some of the country’s poorest people. Bank executives hosted lunch in a private suite with chefs and butlers, seen as a gaudy excess by IDB employees used to less ostentation.
IDB Invest was mulling an equity stake in Ueno, but the visit in 2025 raised too many red flags, according to people familiar with what happened who asked not to be identified because they weren’t authorized to speak with the press. An IDB Invest spokesperson declined to comment.
Fifteen months later, the bank’s swift collapse is reverberating through the country’s politics, business community and the lives of everyday savers who woke up this week to find they’d been locked out of their accounts. Controlling shareholder Miguel Vázquez, one of Paraguay’s richest men, is in jail. President Santiago Peña, formerly an investor in the bank’s parent company, offered his resignation under threat of impeachment. The central…
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