Paraguay Congress Impeaches President Santiago Peña Following Commercial Bank Collapse

Paraguay's Senate voted 44 to 1 on Friday to remove President Santiago Peña from office, citing poor performance of duties following the insolvency and collapse of Ueno Bank.

Minutes after the vote, prosecutor Silvia Margarita Gonzalez Vester confirmed that law enforcement placed the former president under house arrest. Peña, who had offered his resignation on Thursday, was instead impeached by lawmakers, stripping him of presidential immunity. He faces prosecutorial questioning over breach of trust, influence peddling, and misappropriation of funds. Vice President Pedro Alliana was sworn in as Paraguay's new president to complete the term running until 2028.

An opposition motion to impeach Alliana alongside Peña failed to secure congressional approval. Upon taking office, Alliana pledged that depositors harmed by the financial crisis would receive full compensation. The central bank intervened in Ueno Bank earlier in the week following insolvency concerns, locking approximately three million account holders, including pensioners, out of their funds.

Peña previously held equity in Grupo Vazquez, the parent company controlling Ueno Bank, until last year. The collapse prompted mass street protests across the capital of Asuncion after customers formed long lines outside closed bank branches on Tuesday and Wednesday. Central Bank Deposit Guarantee Fund official Jose Maciel stated that initial relief disbursements of up to 1,600 dollars began Thursday afternoon, prioritizing affected depositors who hold accounts at alternative financial institutions and carry no outstanding loans.