Paraguayan President Santiago Peña Resigns Following Bank Collapse - CNN
Paraguayan President Santiago Peña announced his resignation on Thursday, November 5, amid a major financial crisis triggered by the closure of Ueno Bank due to a solvency crisis.
The day before, the country’s Congress had initiated impeachment proceedings against the head of state, accusing him of a conflict of interest, the misuse of state and pension funds from the Social Security Institute that had been accumulated at the bank, and the concealment of information.
The Paraguayan president found himself at the center of a crisis that erupted following the government’s intervention in the operations of Ueno Bank. This is a private financial institution with which Peña had been linked. During his presidency, the bank received millions of dollars from government agencies, including the Social Security Institute (IPS), which manages the pension funds of most of the country’s workers—funds that were ultimately lost.
The Central Bank of Paraguay took control of Ueno Bank after regulators discovered improperly documented loans to companies linked to the bank’s owners, as well as expenses that had been erroneously recorded as assets. After adjusting the financial statements, the bank’s capital was found to be less than half of the statutory minimum. The financial institution’s solvency ratios falling below the minimum threshold affected the interests of millions of customers and undermined the country’s economic stability. Peña’s resignation will now be considered by the Paraguayan parliament.
Source: CNN.
In Paraguay, the Chamber of Deputies unanimously approved the impeachment of President Santiago Peña just minutes after he announced his resignation. The vote took place amid a crisis surrounding the digital Ueno Bank, after regulatory intervention left customers unable to access their savings, salaries, and pensions. Authorities detained eight Ueno executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale. Prosecutors also filed charges against 27 bank employees and business partners in cases involving, among other things, breach of trust and attempted fraud.
