President Santiago Peña of Paraguay announced his resignation on Thursday, following a banking crisis that has affected nearly 3 million savers and triggered a political crisis in the country. Peña, a conservative leader, has been in power since 2023 and cited the need to preserve democratic institutions and social peace as the reason for his decision. His vice president, Pedro Alliana, is expected to take over as president.
The crisis began 48 hours prior, when the Central Bank of Paraguay (BCP) placed Ueno Bank under receivership, freezing deposits of the financial institution, which claims 2.94 million clients. The move sparked outrage among small savers, who protested outside the bank's agencies in Asuncion and demanded Peña's resignation. Some protesters, including Nadia González, a 26-year-old mother of three, expressed frustration that Ueno Bank had approved a loan for their first home but failed to disburse the funds.
Peña had previously owned shares in a holding company that controlled Ueno Bank, which has experienced rapid growth in recent years. The bank's collapse led to a chaotic situation, with hundreds of people protesting outside the Parliament, chanting "Santi fuera!" (Santi out). The protests resulted in clashes with the police.
The Parliament had convened an extraordinary session to discuss Peña's impeachment, but ultimately approved his resignation unanimously, including members of Peña's Colorado Party. However, they rejected an impeachment procedure for Vice President Alliana, paving the way for him to assume the presidency.
As part of the crisis management, eight Ueno Bank executives were detained, and charges were filed against about 20 others. The Parliament also adopted a law providing for initial payments to affected savers, with advances of up to the equivalent of 40 minimum monthly wages (approximately $20,000).
In his resignation message, Peña stated that his priority was now the tranquility of Paraguayans who had entrusted their savings to the financial system. He apologized to the people if he had failed them at any point, saying he had never intended to betray the trust placed in him.
Peña, an economist who previously worked at the BCP and the International Monetary Fund, was comfortably elected in 2023 as the leader of the Colorado Party, which has dominated Paraguayan politics for seven decades. His resignation has raised questions about the country's stability and the future of its financial system.
Key points
- The crisis at Ueno Bank has affected nearly 3 million savers, triggering widespread protests and calls for President Peña's resignation.
- Vice President Pedro Alliana is expected to assume the presidency following Peña's resignation.
- The Paraguayan Parliament has approved a law providing initial payments to affected savers, with advances of up to the equivalent of 40 minimum monthly wages.
