{"id":19346,"date":"2026-11-06T09:44:02","date_gmt":"2026-11-06T16:44:02","guid":{"rendered":"https:\/\/jasonsblog.ddns.net\/?p=19346"},"modified":"2026-11-06T09:44:02","modified_gmt":"2026-11-06T16:44:02","slug":"paraguay-president-pena-under-investigation-faces-removal-from-office-over-bank-collapse","status":"publish","type":"post","link":"https:\/\/jasonsblog.ddns.net\/index.php\/2026\/11\/06\/paraguay-president-pena-under-investigation-faces-removal-from-office-over-bank-collapse\/","title":{"rendered":"Paraguay President Pe\u00f1a Under Investigation, Faces Removal From Office Over Bank Collapse"},"content":{"rendered":"\n

A good reminder that a bank is a house of cards, as fractional reserve banks increase money supply and are only backed by about 10% of savings held. As loans of savings not properly backed increase money in the economy, and banks are dead once confidence is lost and a bank run commences. People think the US is immune to this problem, but the petro dollar is dying. And the federal insurance fund to cover bank deposits is not well funded for a major economic collapse, which will lead to money printing to cover creating extreme inflation, devaluing the money, and possibly with haircuts, partial repayments worth even less. This is why people hedge with Gold and other precious medals along with Bitcoin<\/a>. And even when things are going well they use inflation to steal from your savings while profiting, so the banking system with paper assets is just evil exploitation of their customers, with the banks keeping most of the proceeds from your savings while the system devalues it. <\/p>\n\n\n\n

https:\/\/apnews.com\/article\/ueno-bank-collapse-paraguay-banking-crisis-santiago-pena-impeachment-eccea1c9a64808b5cd7e6e1d5542084f<\/a><\/p>\n\n\n

<\/div><\/div><\/div>\n\n\n
Paraguay President Santiago Pe\u00f1a resigned Thursday, days after the collapse of Paraguay\u2019s central bank seized Ueno Bank. (AP video\/Emilio Sanabria) Read More<\/h5>\n\n\n\n

By\u00a0 ISABEL DEBRE, NAYARA BATSCHKE and EMILIO SANABRIA <\/p>\n\n\n\n

ASUNCI\u00d3N, Paraguay (AP) \u2014 Paraguayan President Santiago Pe\u00f1a<\/a> is under criminal investigation following the collapse of a major digital bank<\/a>, prosecutors announced, as the South American leader prepares to defend himself before the Senate against possible removal from office on Friday.<\/p>\n\n\n\n

The crisis at Ueno Bank turned Pe\u00f1a\u2019s long-ruling Colorado Party against him, a stunning reversal for the former International Monetary Fund economist who had enjoyed the backing of the country\u2019s most powerful politicians and was welcomed in Washington just weeks ago as a key ally of the Trump administration<\/a>.<\/p>\n\n\n\n

In a day of lightning-speed developments, Pe\u00f1a offered his resignation Thursday via X, with the lower house voting unanimously to impeach him moments later. Both houses declined to accept Pe\u00f1a\u2019s offer to resign, with the Senate instead deciding to press forward with a trial that could result in the president\u2019s removal from office.<\/p>\n\n\n\n

Opposition senators are continuing to demand that Pe\u00f1a be removed from office, arguing that allowing him to resign would preserve his eligibility to become a senator for life, with legal protections that could prevent his prosecution, should Paraguay\u2019s Attorney General Emiliano Rol\u00f3n Fern\u00e1ndez opt to file charges.<\/p>\n\n\n\n

Rol\u00f3n has ordered three criminal investigations into the Ueno Bank crisis, including allegations involving Pe\u00f1a and other current and former government officials, the prosecutor\u2019s office said Thursday.<\/p>\n\n\n\n

The investigations will examine authorities\u2019 oversight of the bank, their handling of its failure and the placement of public funds in the lender.<\/a><\/p>\n\n\n\n

Pe\u00f1a said he would cooperate with investigators.<\/p>\n\n\n\n

\u201cWhatever the outcome of this process, I will act with responsibility and respect for the Constitution,\u201d he said on X.<\/p>\n\n\n\n

Earlier Thursday, Pe\u00f1a said in a video posted to X that he was stepping down in the interest of \u201cthe stability of our country, social peace and the need to preserve our democratic institutions.\u201d<\/p>\n\n\n\n

Pe\u00f1a, who until last year held a stake in a company linked to Ueno, expressed contrition. But he stopped short of accepting responsibility for the turmoil, which has left millions of depositors, retirees and workers scrambling to recoup their frozen savings and unpaid wages. If he\u2019s removed from office, Vice President Pedro Alliana would replace him as Paraguay\u2019s leader.<\/p>\n\n\n\n

\u201cI want to apologize to the people if I have failed them at any point,\u201d he said. \u201cIt was never my intention to betray the trust they placed in me.\u201d<\/p>\n\n\n\n

\"Paraguay
Paraguay President Santiago Pe\u00f1a speaks to the media at United Nations headquarters, Sept. 19, 2023. (AP Photo\/Ted Shaffrey, File) License this photo<\/a><\/figcaption><\/figure>\n\n\n\n

From star lender to seized bank<\/h2>\n\n\n\n

Ueno Bank, which exploded from an obscure finance company to a household name in less than five years, claimed more than 60% of Paraguay\u2019s adults as customers. Many Paraguayans are left asking how a bank linked to the president could grow so rapidly in size and importance despite repeated warnings about its lending practices.<\/p>\n\n\n\n

The answer lies in the uncomfortable proximity<\/a> of Pe\u00f1a\u2019s Colorado Party<\/a> to the country\u2019s regulators and business elite, a weakness that has endured<\/a> even as steady economic management and rapid growth recently earned Paraguay coveted investment-grade credit ratings.<\/p>\n\n\n\n

\u201cSantiago Pe\u00f1a and the Colorado Party have stolen all our savings,\u201d said Luis Pineda, one of the protesters marching to Congress on Wednesday. \u201cWe are fed up with 70 years of plunder.\u201d<\/p>\n\n\n\n

Soon after winning its banking license in 2023, Ueno seemed to be everywhere in Paraguay. The digital lender, a rebranded version of a decades-old finance company, lured customers with generous cash-back offers on groceries as it grew to more than 70 locations, sponsored Paraguay\u2019s national soccer team and plastered its name on the country\u2019s main stadium.<\/p>\n\n\n\n

Government money poured into Ueno\u2019s coffers under Pe\u00f1a. He also appointed Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank, the agency charged with supervising the digital lender.<\/p>\n\n\n\n

As of last month, Ueno reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the state pension and health fund and the operators of Paraguay\u2019s giant hydroelectric dams.<\/p>\n\n\n\n

But worries were escalating inside the central bank. In June, its inspectors found a pattern of risky lending to insiders, reported ABC Color, a leading Paraguayan newspaper. Ueno had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral to cover the debts if they went bad.<\/p>\n\n\n\n

As recently as last month, Pe\u00f1a defended Ueno and the central bank\u2019s oversight, dismissing the concerns as a smear campaign that was spooking the public.<\/p>\n\n\n\n

\"Executives
Executives of Ueno Bank, taken over by Paraguay\u2019s central bank amid a solvency crisis, arrive in custody at the anti-corruption prosecutor\u2019s office in Asuncion, Paraguay, Wednesday, Nov. 4, 2026 (AP Photo\/Jorge Saenz) License this photo<\/a><\/figcaption><\/figure>\n\n\n\n

Long lines outside branches but customers are locked out<\/h2>\n\n\n\n

But on Monday, it all came crashing down. Regulators investigating Ueno\u2019s loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets.<\/p>\n\n\n\n

Once the books were corrected, Ueno\u2019s capital, the cushion banks must keep to absorb losses, fell to less than half the legal minimum. The central bank announced the lender\u2019s seizure Tuesday, beginning a process to transfer deposits and recoverable assets to other banks before liquidating what remained.<\/p>\n\n\n\n

Ueno\u2019s app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside. On Wednesday, a rush to open new accounts elsewhere crashed other banks\u2019 mobile apps, fueling public panic.<\/p>\n\n\n\n

Officials have appealed for calm. Under a law rushed through Congress on Wednesday, a state guarantee fund must repay stranded depositors within five business days, starting Thursday with small accounts of up to about $1,600. The fund insures up to about $36,000 per customer, which the central bank says will cover the full balances of an estimated 97% of clients.<\/p>\n\n\n\n

On Thursday, a judge ordered six Ueno executives, including founder Miguel V\u00e1zquez and bank President Juan Manuel Gustale, jailed pending trial and two others placed under house arrest. Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud.<\/p>\n\n\n\n

Gustale\u2019s lawyer pushed back on the charges, arguing that senior executives had relied on staff for lending decisions. \u201cThe president or board is not responsible for deciding who receives a particular loan,\u201d Jos\u00e9 Fern\u00e1ndez Zacur told local media.<\/p>\n\n\n\n

\"People
People protest in front of police against the government and Ueno Bank, which Paraguay\u2019s central bank seized amid a solvency crisis, in Asuncion, Paraguay, Wednesday, Nov. 4, 2026. (AP Photo\/Jorge Saenz) License this photo<\/a><\/figcaption><\/figure>\n\n\n\n

Protesters in the streets<\/h2>\n\n\n\n

Still in their Ueno uniforms, young employees burned their credit cards and cursed Pe\u00f1a outside the Labor Ministry on Thursday, demanding severance and unpaid wages. Pe\u00f1a\u2019s resignation did little to calm them.<\/p>\n\n\n\n

\u201cLet the impeachment process take place and let him lose his immunity,\u201d said Adolfo Villalba, one of the protesters on Thursday.<\/p>\n\n\n\n

The Labor Ministry estimates the collapse has affected about 7,000 direct and indirect jobs at the bank and its related businesses.<\/p>\n\n\n\n

Many saw Ueno\u2019s collapse as a case study in official corruption. Only Venezuela ranks worse in South America on Transparency International\u2019s latest index of perceived corruption.<\/p>\n\n\n\n

\u201cThis is yet another assault on honest, hard-working citizens, people whose small savings are the fruit of years of labor,\u201d said Belarmino Balbuena, one of thousands who marched on Congress in the capital, Asunci\u00f3n, on Wednesday.<\/p>\n","protected":false},"excerpt":{"rendered":"

A good reminder that a bank is a house of cards, as fractional reserve banks increase money supply and are only backed by about 10% of savings held. As loans of savings not properly backed increase money in the economy, and banks are dead once confidence is lost and a bank run commences. People think […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-19346","post","type-post","status-publish","format-standard","hentry","category-world"],"featured_image_src":null,"author_info":{"display_name":"Jason","author_link":"https:\/\/jasonsblog.ddns.net\/index.php\/author\/jturning\/"},"_links":{"self":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/19346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/comments?post=19346"}],"version-history":[{"count":1,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/19346\/revisions"}],"predecessor-version":[{"id":19347,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/19346\/revisions\/19347"}],"wp:attachment":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/media?parent=19346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/categories?post=19346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/tags?post=19346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}