Paraguay president resigns following banking crisis

Paraguay's rightwing president, Santiago Peña, resigned on Thursday following a political and financial crisis that collapsed the nation's banking system. The turmoil centered on Ueno Bank, which grew rapidly under Peña's administration to claim about 60% of the adult population as customers.

Last Monday, the central bank ordered Ueno into resolution over insolvency, freezing the deposits of three million customers and leaving hundreds of thousands of families without funds for food and basic expenses. Bank executives faced arrest while citizens took to the streets in massive protests. Lawmakers filed an impeachment motion holding the president responsible, pointing to his previous shareholding ties to the institution and ignored warnings.

As political pressure mounted, including an endorsement of impeachment from former ally Horacio Cartes, Peña announced his resignation in a video to preserve institutional order and social peace. He insisted he committed no wrongdoing and had disposed of his shares, apologizing to citizens who trusted their savings to the financial system. Shortly after his announcement, the lower house unanimously approved the impeachment motion, which moved to the senate to determine whether he loses his senate seat and parliamentary immunity.

Paraguay president Santiago Peña resigned after the banking crisis froze millions of savings.

Uncertainty remains regarding his replacement, as Congress must accept the resignation, which could lead vice-president Pedro Alliana to take over. Meanwhile, the crisis has disrupted daily life across the country, affecting millions of ordinary citizens and pensioners who lost access to their money.

Why it matters The downfall of Paraguay president Santiago Peña marks a profound political and economic turning point for the nation, highlighting vulnerabilities in financial regulation and the risks of close ties between political power and private banking operations.