Paraguay president quits after bank collapse sparks unrest
SingTao · 2 SOURCES1 day ago2 MIN
Summary
Paraguay's crisis deepened after Ueno Bank, a fast-growing digital lender with more than three million users, was forcibly taken over by the central bank in the early hours of Tuesday, 3 November, and placed into dissolution, immediately knocking out its app, cards and services. President Santiago Peña later announced his resignation around 2am Hong Kong time on Friday, 6 November, while the Chamber of Deputies moved ahead with impeachment proceedings that were subsequently approved unanimously and sent to the Senate.
Key Points
- The Central Bank of Paraguay said Ueno Bank's capital adequacy had fallen below 50% of the legal standard and that it could not meet a required reserve of US$70 million
- The bank, founded only three years ago, had managed about US$850 million in public funds, including money linked to the IPS social insurance fund for pensions and healthcare
- Customers across Paraguay found their account screens blank at 3:24am Eastern Time on Tuesday, 3 November, with balances unavailable as all banking functions failed
- Prosecutors charged 27 people on Wednesday, 4 November, and police detained eight senior executives, including chief executive Miguel Vázquez, over the collapse
- Opposition lawmakers accused Peña of conflict of interest because he had held shares in Ueno Holding, while former central bank chief Carlos Carvallo had chaired the bank's board.
Why It Matters
For Hong Kong readers, the case is a sharp reminder that confidence in digital-only finance can unravel quickly when governance, reserves and political oversight are questioned. The next focus is whether Paraguay's Senate will secure the two-thirds majority needed to formally remove Peña after the lower house approved impeachment despite his resignation