Paraguay in Crisis: President Resigns as Bank Collapse Shakes Nation

Paraguay is currently experiencing one of the most difficult periods in its recent history. A massive financial collapse has left millions of people unable to access their money, leading to widespread public protests and a major political shift. On Thursday, President Santiago Peña announced his resignation, stating that he wanted to put the needs of the country above his own position.

According to The Guardian, the crisis began when the central bank ordered Ueno Bank into resolution. This is a process where the government takes control of a failing bank because it no longer has enough money to cover its debts, a state known as insolvency. Ueno Bank had grown very quickly in recent years, claiming to serve about 60% of the adult population in Paraguay. When the bank stopped operations on November 3, it left hundreds of thousands of families without the money they needed for food and basic daily expenses.

Deutsche Welle reports that the central bank intervened after finding that Ueno Bank did not meet the minimum rules for financial safety. The bank is believed to have lent too much money to other companies owned by the same business group, which may have hidden the bank’s true financial problems. Authorities have now launched multiple investigations, and 27 people have already been formally charged with financial crimes.

President Peña, an economist who has been in power since 2023, faced immediate pressure as the public learned that the bank held between $800 million and $850 million in public money. This included retirement funds and social security payments. Critics have pointed to a conflict of interest, as Peña previously held shares in the group that owns Ueno Bank. While Peña argued that he had sold his shares and called the accusations a "false media campaign," many lawmakers disagreed.

By Thursday, the political situation had become very tense. Even members of Peña’s own Colorado party turned against him. Former president Horacio Cartes, a key political ally, publicly supported the move to remove Peña from office. Cartes stated that the party could not support the loss of public and pension funds. Although Peña announced his resignation in a video message, the path forward remains complicated. Deutsche Welle noted that the Paraguayan Congress did not immediately accept his resignation. Instead, the Chamber of Deputies voted unanimously to move forward with impeachment, a formal process to remove a government official from office for alleged misconduct.

Public anger has been visible across the country. Thousands of people gathered outside Congress to protest, demanding answers and the return of their savings. The national football team also joined the conversation, releasing a letter that demanded a strong response from the government and the justice system. The scale of the problem is significant, as the bank’s rapid growth meant that nearly half of the country’s population had accounts there.

As the country waits for a resolution, many questions remain about how state institutions chose to invest such large amounts of public money in a single digital bank. Experts are asking why the central bank did not act sooner, despite earlier warnings about the bank’s operations. For now, the government is working to manage the fallout, but the loss of trust in the financial system will likely be felt for a long time.

Looking ahead, the focus is on restoring stability. With the president’s future uncertain and millions of citizens still unable to access their accounts, the government is under immense pressure to provide a solution. The coming days will be critical as officials try to find out exactly how much money is missing and how to protect the people who have been most affected by this collapse.