Paraguayan President Santiago Pena resigned after regulators shut Ueno Bank and froze customers’ accounts, sending a banking crisis into the presidency, Bloomberg Television reported in a video published Nov. 10.
The closure left customers unable to reach savings, salaries and pensions. The crisis spread to the government, whose ties to the bank had drawn criticism over potential conflicts of interest.
The video, “How a Bank Collapse Brought Down a President,” put the number of people with accounts at Ueno at 2.9 million. Customers trying to access their accounts received a message asking them to try again later.
Ueno began operating in 2023 and attracted customers with easy access and cashback offers. It brought people into banking for the first time in an economy where informal work is widespread.
The bank also sponsored Paraguay’s national soccer team. Its expansion connected Pena, central bank governor Carlos Carvallo and businessman Miguel Vasquez, who became the bank’s owner.
Pena had invested in a company that eventually became part of Ueno. Carvallo had headed a lending institution that became Ueno before taking charge of the central bank after Pena’s election in 2023.
Pena sold his stake in the bank’s holding company, Grupo Vasquez, in March 2025 after criticism over a potential conflict of interest. He denied wrongdoing. The bank benefited from regulatory decisions under his government.
Ueno’s deposits exceeded 15 trillion guaranies, roughly $2.4 billion, according to Bloomberg. Public institutions supplied a growing share, reaching 20% of total deposits in September, as the bank’s connections to the administration faced scrutiny.
The central bank investigated lending that allegedly sent money to other businesses owned by Grupo Vasquez. Loans passed through apparently unrelated companies before reaching businesses connected to Vasquez and Ueno.
Reclassifying those loans to identify their eventual recipients exposed a hole in the bank’s finances. Regulators then halted operations and blocked access to accounts. Vasquez was arrested and had not responded to the allegations.
Congress began impeachment proceedings against Pena. He subsequently resigned in a social media video, apologising if he had failed Paraguayans and saying his greatest wish was to return their money. He was later placed under house arrest.
Carvallo resigned and faced charges of breach of trust, falsifying documents and enrichment. He had not publicly commented on the charges. The central bank said the failure was isolated and the banking system was sound.
Government deposit insurance covered Ueno accounts, but the share customers would recover was unclear. The timing of access to their money and the shape of the next administration also remained unresolved.
