Paraguay’s President Santiago Peña was impeached and placed under house arrest on Friday, November 6, 2026, following the collapse of Ueno Bank, a financial institution with which he had personal and professional ties. The Senate voted 44 to 45 to remove Peña from office, with one lawmaker absent, shortly after the Central Bank seized the lender, leaving an estimated 2.9 million customers—about 60% of the country’s adult population—unable to access their savings.
Senate Votes to Remove Peña
Peña’s impeachment was swift, driven by allegations that he manipulated regulatory oversight and diverted public pension funds to favor Ueno Bank. He had attempted to resign on Thursday, stating he did so to preserve our public institutions
. However, lawmakers rejected his resignation, opting instead to impeach him to strip him of the immunity typically granted to former presidents. Had his resignation been accepted, Peña would have retained the right of former presidents to become a member of the Senate, with legal protections from prosecution.
Minutes after the Senate vote, prosecutors ordered Peña placed under house arrest at his home in Asunción. The warrant, issued in connection with criminal case No. 92/2026, alleges illicit enrichment, money laundering, and influence peddling. Peña’s legal team represented him during the proceedings, but he did not appear in person, opting to post on social media instead. It is my responsibility to place the country above my own personal fate,
he wrote.
Bank Collapse Followed by Protests
The crisis began on Tuesday when the Central Bank of Paraguay announced that Ueno had fallen below legal solvency requirements. The bank, which had grown to become the country’s fifth-largest by deposits, was seized to protect remaining assets, freezing customer accounts and pension payments. The move triggered nationwide protests, some turning violent, and crippled consumer spending, with retail sales falling by as much as 80% as citizens lost access to their funds.
An estimated $800m to $860m in state and pension funds were invested in the bank. Peña’s personal ties to the bank are central to the scandal: he bought shares in Ueno’s parent company in 2019 and held them until April 2025, after becoming president. In 2023, he was identified as a shareholder of Ueno’s parent company.
Prosecutors are investigating whether Ueno was shielded from accountability due to government connections. Opposition Senator Rafael Filizzola called the situation the biggest corruption scandal in our democratic history – a tremendous blow to the state, to private citizens, and to the country’s credibility and image.
The Colorado Party, Peña’s own party, supported his impeachment, with former President Horacio Cartes stating, We support the impeachment of the president of the republic, Santiago Pena, in order to restore the republic’s institutions.
Alliana Sworn in as New President
Vice President Pedro Alliana was sworn in as president immediately after the impeachment vote. Alliana, a member of the Colorado Party who served as governor of Neembucu and in the Chamber of Deputies, vowed to address the crisis, promising, Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated.
He will serve the remainder of the current presidential term, which concludes on August 15, 2028.
The impeachment proceedings also saw the Chamber of Deputies vote 78 to zero to impeach Peña on Thursday, following his request for an extension to exercise his constitutional right to a defence.
Peña Denies Wrongdoing
Peña has denied wrongdoing, calling the allegations against him a reckless accusation
that is irresponsible and opportunistic,
according to his defense lawyer Ricardo Preda. In an address to the nation on Thursday, Peña expressed regret, saying it was never my intention to betray the trust you placed in me.
The U.S. administration and Paraguay maintain a strong relationship, with statements noting a commitment to the enduring relationship between the American and Paraguayan people and looking forward to continuing close cooperation on shared priorities. Meanwhile, the Central Bank has begun processing guarantee payments to Ueno customers, though the full extent of the financial fallout remains unclear.
Earlier coverage: Paraguay's President Santiago Peña resigns after Ueno bank collapse
