A sudden blank screen startled almost three million customers of Ueno Bank in the early hours of Tuesday 3 November. At around 03:24, the app of the Paraguayan institution, a key player in the system that manages state funds worth millions and has grown at breakneck speed in its three years of existence, stopped displaying users’ accounts and showed a single message: “We cannot display the balance”.
At the same time, the Banco Central del Paraguay published a tough statement on its social media accounts: the bank was placed under intervention and its winding-up process began. The reason for this “resolution procedure” against Ueno Bank was a wider financial warning, after a critical collapse in its solvency ratio had been detected, with the figure falling below 50%.
The impact was immediate and triggered a political earthquake without precedent for the government of Santiago Peña. Since Tuesday, crowds of angry users have gathered around the main headquarters in Asunción and the bank’s 75 branches across the country, hoping to save their money.
Outside the premises, which are closed and guarded by security staff, the scene has turned into one of extreme tension and utter despair. The anguish at the doors of the branches translates into daily emergencies that are impossible to handle. Some people, in tears, begged to withdraw their funds to pay for medicines for a gravely ill child; a few kilometres away, a construction worker was equally desperate when he saw that, without access to his savings, he would not even have money to buy food for his children that day.
The spectre of the corralito
The bank held around 850 million dollars (about 758 million euros) in public resources, including the funds of the Instituto de Previsión Social which support pensions and healthcare coverage for workers. The spectre of a corralito in the Argentine style immediately set alarm bells ringing among the population. “Who will answer for a lifetime of savings? Will there be impunity?” read the banners held by protesters standing firm outside the branches.
The whole country held its breath as it waited for the press conference of the Banco Central del Paraguay (BCP). The official confirmation was categorical: “We have closed the institution; neither the app, nor the cards, nor any service is active as of today”, stated board member Liana Caballero. The authorities’ attempts to calm tempers by reminding people that the law provides for a guarantee fund to reimburse each client up to 75 minimum wages (about 228 million guaranis or 37,700 dollars, around 33,620 euros) were in vain; suspicion and distrust had already completely taken over the streets.
Impeachment move against Peña and judicial pressure
The political opposition accuses the BCP leadership of being complicit by omission in the fraud, but the fatal blow is aimed directly at the head of state. Santiago Peña has found himself in the eye of the storm: at the request of 35 legislators, the Chamber of Deputies will meet tomorrow in an extraordinary session to vote on whether to open impeachment proceedings against him. The process will only go ahead if it secures 53 votes in the lower house and, afterwards, the backing of two thirds of the Senate.
The indictment accuses Peña of “poor performance of his duties”, on the basis of serious charges ranging from conflict of interest and the alleged embezzlement of pension funds to the institutional shielding of the central bank. In the middle of the storm, the president cancelled his entire official agenda on Wednesday and opted for silence until well into the afternoon, when he reappeared online to announce the departure of the head of the central bank and to demand that the courts establish responsibility.
The judicial net closed in on Wednesday with the arrest of eight senior executives of the bank, among them its chief executive, Miguel Vázquez. At the same time, the knock-on effects quickly hit the real economy: the Association of Importers and Retailers warned of an immediate 35% plunge in sales at the country’s major retailers. With their money blocked and inaccessible, domestic consumption came to a sudden halt overnight.
Football, advertising and an inevitable collapse
In a country of just over six million inhabitants, the Ueno Bank app went far beyond the financial sphere. Owned by the influential Grupo Vázquez and recognisable for its unmistakable fluorescent green design, the bank boasted of having buried the heavy bureaucracy of the country’s traditional agrarian republic. Its presence was ubiquitous in the media and in the sponsorship of the country’s most important football clubs, such as Cerro Porteño and Olimpia, as well as the emblematic Defensores del Chaco stadium.
Only a few days earlier, the bank had been trumpeting an ambitious capitalisation plan worth 100 million dollars. However, behind the advertising façade and its sports patronage, the Superintendencia de Bancos uncovered a stark and unsustainable accounting reality: the bank was unable to meet a compulsory reserve of 70 million dollars (62.427 million euros) required by the central bank. The financial collapse was a matter of numbers; the subsequent explosion was pure political dynamite.
An economist with a technocratic profile and a former official of the International Monetary Fund, Santiago Peña came to power in 2023 with the promise of turning the country into a magnet for foreign capital. Although under his leadership Paraguay has posted one of the strongest rates of economic growth in South America, the sudden banking collapse has left the president facing the most critical moment of his term.