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Paraguayan President Santiago Peña submitted his resignation on November 5 after the collapse of Ueno bank left about 3 million customers unable to access their savings.
The central bank found the lender’s solvency ratio had fallen below half the legal minimum, and it has begun paying guaranteed deposits as lawmakers pursued impeachment.
Peña announced his decision in a recorded address on November 5, as political pressure intensified over the financial institution’s failure.
According to Reuters, the president had lost support from members of his conservative Colorado Party, while opposition lawmakers were preparing impeachment proceedings.
Demonstrators had also demanded his resignation and the recovery of savings frozen following the banking crisis.
In his address, Peña explained that his decision was intended to protect the country’s political and financial stability.
“I do so with the stability of our country, social peace, and the need to preserve our democratic institutions in mind,” — Santiago Peña, President of Paraguay, in his November 5 address.
The president also expressed concern about the financial consequences for depositors and the need to safeguard public resources.
The collapse of Ueno bank placed his administration under intense scrutiny because of allegations concerning the institution’s relationship with government officials and public funds.
Lawmakers accused Peña of conflicts of interest, misuse of pension resources, and institutional efforts to conceal problems involving the lender.
These accusations remain allegations, and the president has denied wrongdoing.
Reuters reported that the bank administered approximately $850 million in public funds, making its failure a significant concern beyond individual customer deposits.
The crisis intensified as customers struggled to access their accounts, prompting demands for stronger government intervention.
The Central Bank of Paraguay announced resolution proceedings on November 3 following a unanimous board decision dated November 2.
According to the regulator, adjustments to the institution’s financial statements during a regularization process revealed that its solvency ratio had fallen below half the legally required minimum.
The finding prompted authorities to initiate a formal resolution process intended to protect depositors and preserve financial stability.
Under the procedure, appointed administrators are responsible for examining the institution’s financial position, safeguarding remaining assets, and coordinating the recovery process.
The Ueno bank intervention follows earlier regulatory concerns involving loans associated with companies connected to the lender’s ownership group.
In an October 14 statement, the bank said it had complied with corrective measures issued by regulators on June 5 and July 24.
Those measures reportedly included changes to how related companies were classified, adjustments to consolidated financial exposure, and the sale of part of a loan portfolio.
The lender maintained that the corrective actions had been completed within the required deadlines without resulting in penalties.
However, it acknowledged a separate administrative proceeding involving allegations of indirect financing connected to a portfolio sale.
The bank disputed allegations that the transaction violated regulatory requirements.
The situation worsened after authorities discovered that the lender’s financial position no longer satisfied the minimum solvency threshold.
Local reporting also indicated that eight executives associated with the institution and related companies were detained on November 3.
Those named included bank president Juan Manuel Gustale and Grupo Vázquez president Miguel Vázquez.
Authorities have continued examining the circumstances surrounding the institution’s financial deterioration.
As the political crisis unfolded, the Central Bank of Paraguay announced the first stage of payments to eligible depositors on November 5.
The initial reimbursement process prioritizes customers holding combined deposits of no more than 10 million Paraguayan guaraníes.
To qualify for the first payment group, depositors must satisfy three conditions: their total deposits must fall within the specified threshold, they must have no outstanding debts with the failed lender, and they must maintain an active account at another domestic bank or financial institution.
Eligible customers meeting those requirements are entitled to receive their full covered balances under the initial payment arrangement.
The central bank emphasized that the first-stage threshold is separate from Paraguay’s broader statutory deposit insurance ceiling.
Under the country’s deposit guarantee framework, eligible deposits are protected up to approximately 228.3 million guaraníes per depositor at each financial institution.
The guarantee applies to the combined amount held by an individual or entity at a particular bank rather than separately to each account.
This distinction is important for customers attempting to determine how much of their savings may be protected.
The Ueno bank reimbursement process is expected to proceed in stages as authorities verify customer records and determine payment eligibility.
The central bank said further announcements concerning subsequent payment groups would be communicated through its official channels.
For customers with balances above the first-stage threshold, recovery will depend on the applicable guarantee arrangements and subsequent resolution procedures.
The regulator has also urged depositors to rely on official announcements rather than unverified information circulating during the crisis.
The payments represent an initial attempt to restore access to savings for affected customers, although the broader resolution process remains ongoing.
The banking disruption has also coincided with unusual pricing in selected peer-to-peer cryptocurrency advertisements.
According to The Cryptonomist, a seller on cryptocurrency exchange Bybit advertised Tether’s USDT stablecoin at approximately 6,942 Paraguayan guaraníes on November 5.
That asking price was roughly 13% above the central bank’s previous daily U.S. dollar reference rate of 6,144.02 guaraníes.
However, the advertised premium did not represent a uniform market exchange rate.
Other listings on the same platform reportedly offered substantially lower prices, including smaller transactions near 5,000 guaraníes.
The difference illustrates how prices can vary considerably across individual peer-to-peer advertisements depending on the seller, available liquidity, payment arrangements, and transaction size.
The reports do not establish that the banking crisis directly caused the higher USDT asking price.
Nevertheless, the listings emerged during a period of financial uncertainty as millions of people faced restrictions on access to their accounts.
For Paraguay, the Ueno bank crisis presents both financial and political challenges.
The immediate priority is ensuring that eligible depositors recover their funds while authorities investigate the lender’s financial condition and the allegations involving officials and executives.
The president’s submitted resignation has added another layer of uncertainty, with Congress responsible for determining the next constitutional steps.
Under Paraguay’s constitutional succession provisions, Vice President Pedro Alliana would assume the presidency if Peña’s resignation is accepted.
Peña originally took office in August 2023 for a five-year term scheduled to conclude in 2028.
The collapse of Ueno bank has therefore developed into a major test of the country’s regulatory institutions, deposit protection system, and political leadership.
While authorities have begun processing guaranteed payments, the full financial consequences remain uncertain.
The outcome will depend on the resolution of the failed lender, recovery of affected assets, and the ability of government institutions to restore confidence in Paraguay’s banking system.
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