Sunday, November 8, 2026 -Paraguay has plunged into a major political and financial crisis following the removal of former President Santiago Peña from office over allegations linked to the collapse of Ueno Bank. Peña appeared before prosecutors in Asunción on Saturday, November 7, as investigators intensified their probe into suspected financial misconduct and abuse of public office.
The former president was initially placed under house arrest following his impeachment, before a judge ordered his pretrial detention at a military facility. The dramatic developments have shaken the country's political leadership and raised fresh concerns about accountability in public institutions.
Prosecutors accuse Peña of breach of trust and administration for personal gain, alleging that he used his presidential influence to encourage government agencies and state-owned institutions to maintain substantial deposits with Ueno despite his financial connections to the bank's holding company.
Peña reportedly held shares in the holding company until March 2025. He has denied wrongdoing and pleaded not guilty, with his lawyer insisting that he will cooperate fully with the investigation. The collapse of Ueno has affected millions of customers, leaving many unable to access their savings and triggering protests across the country. Regulators have begun reimbursing eligible depositors, with approximately $160 million reportedly paid to nearly 1.2 million savers.
The political fallout has already reshaped Paraguay's leadership, with former Vice President Pedro Alliana taking over following Peña's removal from office. The investigation now places pressure on the country's financial regulators, political institutions and justice system to establish responsibility for the banking crisis.
Beyond the criminal proceedings, the government faces the urgent task of restoring public confidence, protecting depositors and stabilising the financial sector. The outcome of Peña's case could have lasting implications for political accountability and investor confidence in Paraguay as authorities work to contain the wider economic damage.
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