Paraguay's President Santiago Peña Ousted Amid Banking Scandal

Paraguay's President Santiago Peña was removed from office on November 7, 2026, after lawmakers voted unanimously to impeach him over his alleged involvement in a banking scandal. The Senate's decision followed a similar vote in the lower house, with Vice President Pedro Alliana sworn in as the country's new leader. Alliana, a 52-year-old businessman and member of the Colorado Party, will serve until August 2028.

Peña's impeachment and ousting are linked to a financial crisis in Paraguay, which began with the effective insolvency of Ueno Bank, a major lender in the country. The bank's capital adequacy ratio fell below half the required minimum, prompting the central bank to launch proceedings to wind down the lender. This move left millions of people fearing for their savings, as customers temporarily lost access to their accounts.

Peña maintained business ties with Grupo Vázquez, which included Ueno Bank, until March 2025, but has consistently denied allegations of conflicts of interest. The Attorney General's Office has opened several investigations into Peña, focusing on the supervision of the bank, its winding-down process, and the provision of public funds to the lender. Prosecutors have also confirmed the arrests of bank executives.

An arrest warrant has been issued for Peña, who must remain under house arrest until he appears before a specialist unit for economic crime and corruption. The warrant was also issued for central bank chief Carlos Carvallo, who was forced from his post after facing allegations of a conflict of interest. Several other high-ranking officials, including Interior Minister Enrique Riera and presidential legal adviser Roberto Moreno, have resigned.

Peña did not attend the Senate hearing, instead sending his lawyers to represent him. His lawyers argued that the impeachment proceedings were no longer valid because Peña had already submitted his resignation. However, the Senate and lower house had refused to accept it, as accepting his resignation would have granted him parliamentary immunity as a former president.

Alliana, the new president, is regarded as economically liberal and conservative, and like Peña, belongs to the Colorado Party, which has governed Paraguay for decades. The party's stance and Alliana's business background may influence his approach to addressing the country's financial crisis and the ongoing investigations into Peña's actions.

The crisis in Paraguay highlights the challenges facing the country, including the need for effective financial regulation and the importance of accountability in government. As the investigations into Peña and others continue, the country's leaders will need to navigate these complex issues while addressing the concerns of the public and maintaining stability in the country.

Key points

• Peña's impeachment and ousting mark a significant development in Paraguay's ongoing financial and political crisis.
• The crisis has led to the resignation of several high-ranking officials and the arrest of bank executives.
• Alliana, the new president, faces the challenge of addressing the country's financial crisis and restoring public trust in government.