Ueno Bank collapses in Paraguay; Chairman Peña arrested. Alliana succeeds him

The former president of ParaguaySantiago Peña was arrested at his home in Asunción on the orders of the judiciary in connection with the Ueno Bank case. The arrest took place at the same time as the ceremony at the National Congress during which Pedro Alliana was sworn in, formally assuming the presidency of the Republic following Peña’s removal from office through an impeachment process. The former president is accused of bearing responsibility for the crisis caused by the collapse of Ueno Bank. Overnight protest by hundreds of demonstrators demanding that the former head of state be jailed rather than placed under house arrest: a police officer was injured.

Hundreds of people gathered during the night between Friday and Saturday outside Peña’s house. During the protests, there were reports of stones being thrown by some demonstrators at the cordon of police officers guarding the entrance. It was reportedly a stone that struck the police officer, who was subsequently treated for injuries, in the face. The officers then responded by firing tear gas to disperse the crowd.

Meanwhile, Alliana is greeted by a few of his neighbours. “I extend my best wishes to the new ‘resident of Paraguay’, Pedro Alliana, for every success in his new role, and I look forward to working with him in an open, frank and collaborative manner to strengthen bilateral relations and advance integration in South America,” wrote the Brazilian president-elect Luiz Inácio Lula da Silva. Paraguay is, in fact, one of the Mercosur member states. “I hope to welcome him to Brasília soon, when we will be able to review our bilateral agenda and give new impetus to our long-standing ties of friendship,” added Lula.

In the closing credits, however, we see the story of Peña, who has been in office since 2023 and removed from office following a impeachment trial in the Senate over his role in the banking crisis that affected the savings of nearly 3 million people. The Senate, by a unanimous vote of the 44 members present – out of a total of 45 – found him guilty of ‘misconduct in office’ and, consequently, ‘he has been removed from the post of president’, stated Basilio Nuñez, President of the upper house.

Uncertainty remains over the reimbursement of deposits lost in the wake of Ueno Bank’s bankruptcy, even though the Central Bank of Paraguay has begun to return funds – in the form of advance payments – to savers affected by the crisis. Around three million people have been unable to access their money since Tuesday, when the Central Bank took control of Ueno and froze its accounts.