Paraguay lawmakers begin impeachment trial against president over bank collapse

Paraguay’s Senate has commenced impeachment proceedings against President Santiago Peña following the collapse of a major bank that reportedly left about three million people unable to access their funds and sparked protests across the country.

The president offered to resign amid the growing political crisis, but lawmakers proceeded with the impeachment process, which could strip him of the immunity traditionally enjoyed by former presidents.

The crisis erupted after the Central Bank took control of Ueno Bank on Tuesday and froze its accounts over concerns about the institution’s financial stability, leaving millions of customers unable to withdraw or access their money.

The bank’s collapse triggered protests, with thousands of people taking to the streets to demand accountability from Peña, who had an ownership stake in the group that controlled Ueno until last year.

Political pressure on the president intensified on Thursday when lawmakers from his ruling Colorado Party withdrew their support and voted in favour of initiating impeachment proceedings.

In a televised address to the nation, the 47-year-old president apologised to citizens over the situation, acknowledging that his administration might have fallen short of public expectations.

“I want to apologise to the people if at any point I failed,” Peña said.

“It was never my intention to betray the trust you placed in me,” he added.

As the impeachment process gathered momentum, Peña requested a three-day adjournment of the Senate proceedings on Friday, arguing that he needed additional time to prepare his defence.

However, lawmakers rejected the request and moved ahead with deliberations on his removal from office.

Ueno started as a small financial technology company operating a digital-focused business model, attracting a significant number of customers from low-income communities.

The institution subsequently expanded into a major banking operation, handling government pension payments and managing accounts belonging to several state-owned entities.

The opposition has accused Peña of having a conflict of interest because of his previous connection to the group that controlled the bank, an allegation the president has denied.

Opposition lawmaker Raul Benítez escalated the criticism, accusing the president of running a “criminal scheme.”

Meanwhile, the Attorney General’s Office confirmed that it was investigating Peña over alleged activities connected to the supervision and resolution of Ueno Bank, as well as the placement of public funds in the financial institution.

The office said the investigation concerned “acts related to the supervision and resolution of Ueno Bank S.A. and the placement of public funds in said entity.”

The United States Embassy in Paraguay also reacted to the unfolding crisis on Friday, expressing solidarity with the country’s citizens without directly commenting on the impeachment proceedings or Peña’s political future.