Paraguayan President Santiago Pena has resigned from his position, effective immediately, amid a banking scandal that has left three million depositors without access to their money. In a video announcement, Pena apologized to the people for any failures and stated that his priority is the peace of mind of Paraguayans who entrusted their savings to the financial system. He owned shares in a group that controlled Ueno Bank, which was taken over by the central bank due to a severe capital shortfall.
The crisis began when the central bank took control of Ueno Bank, citing a severe capital shortfall, in order to protect depositors and preserve the stability of the financial system. Long lines of people trying to withdraw their money from Ueno branches snaked down Asuncion's streets, while angry protests swarmed the capital. The opposition lawmakers submitted a request to impeach Pena over the crisis, accusing him of favoritism toward the bank in regulatory and pension fund decisions.
Pena's own Colorado Party backed his removal, while Congress debated the request. Ruling party deputy Alejandro Aquilera stated that the party cannot pretend to be oblivious to the accusations, adding that over three million Paraguayans have been harmed and feel betrayed. Pena had attempted to ease tensions by requesting the resignation of Central Bank president Carlos Carvallo, who subsequently stepped down.
Pena also enacted a law that set a limit of five business days to return most of the funds to depositors. However, the measures proved insufficient, with hundreds of demonstrators in Asuncion calling for his removal and clashing with police, who used tear gas and water cannons on the crowd. Vice President Pedro Alliana will now replace Pena to lead Paraguay.
Pena served as finance minister before becoming president in 2023. He sold his shares in the group that controlled Ueno Bank last year. The central bank's takeover of Ueno Bank was aimed at protecting depositors and preserving the stability of the financial system.
The crisis has sparked widespread protests and outrage across Paraguay, with many calling for accountability and action against those responsible. The country's congress will now consider the impeachment request, and a vote is expected in the coming days.
Pena's resignation marks a significant development in the crisis, and Vice President Alliana will now take over as president. The country's focus will shift to finding a solution to the banking crisis and ensuring that depositors' funds are returned safely.
Key points
- Paraguayan President Santiago Pena resigns amid banking scandal affecting three million depositors
- Pena's Colorado Party backed his removal, and Vice President Pedro Alliana will replace him
- The crisis sparked widespread protests and outrage across Paraguay, with many calling for accountability
