A sudden blank screen took almost three million Ueno Bank customers by surprise in the early hours of Tuesday 3 November. At around 03:24, the app of the Paraguayan institution, a key player in the system which manages multimillion state funds and has grown at breakneck speed in its three years of existence, stopped displaying its users’ accounts and showed a single message instead: “We cannot display the balance”.
At the same time, the Central Bank of Paraguay issued a tough statement on its social media channels: the institution was placed under intervention and its liquidation process was launched. The reason for this “resolution procedure” affecting Ueno Bank was a broader financial alarm, after a critical collapse in its solvency ratio had been detected, bringing it below 50%.
The impact was immediate and triggered a political earthquake without precedent for the government of Santiago Peña. Since Tuesday, crowds of outraged users have gathered around the headquarters in Asunción and the bank’s 75 branches across the country in an attempt to save their money.
The scenes outside the branches, which were closed and guarded by security staff, have turned into a picture of extreme tension and despair. The anguish at the doors of the branches translated into everyday emergencies that soon became unsustainable. Some people, in tears, begged to withdraw their funds to pay for medicines for a seriously ill child; a few kilometres away, a construction worker felt the same desperation on realising that, without access to his savings, he would not even be able to buy food for his children that day.
The spectre of a corralito
The institution held around 850 million dollars (about 758 million euros) in public funds, including the resources of the Social Security Institute that support pensions and health coverage for workers. The spectre of an Argentine-style corralito immediately set off alarm bells among the population. “Who will answer for a lifetime of savings? Will there be impunity?” read the placards held by protesters standing their ground outside the offices.
The whole country held its breath during the press conference given by the Central Bank of Paraguay (BCP). The official confirmation was categorical: “We proceeded to close the institution; neither the app, nor the cards, nor any service at all has been active since today”, said board member Liana Caballero. It made no difference that the authorities tried to calm tempers by reminding people that the law provides for a guarantee fund to reimburse each customer up to 75 minimum wages (about 228 million guaraníes or 37,700 dollars, some 33,620 euros); mistrust and suspicion had already taken full hold of the streets.
Impeachment move against Peña and judicial pressure
The political opposition points to the leadership of the BCP as an accomplice to the fraud through omission, but the final shot is aimed squarely at the head of state. Santiago Peña has been thrust into the eye of the storm: at the request of 35 lawmakers, the Chamber of Deputies will meet tomorrow in an extraordinary session to vote on whether to open impeachment proceedings against him. The viability of the process will depend on securing 53 votes in the lower house and, subsequently, the support of two thirds of the Senate.
The indictment accuses Peña of “poor performance of his duties”, backed by serious charges that range from conflicts of interest and the alleged misappropriation of pension funds to providing institutional protection to the Central Bank. In the middle of the storm, the president cancelled his entire official schedule on Wednesday and chose to remain silent until well into the afternoon, when he reappeared online to announce the departure of the head of the central bank and call on the courts to establish accountability.
The judicial clamp tightened on Wednesday with the arrest of eight senior executives of the institution, including its chief executive, Miguel Vázquez. At the same time, the knock-on effects soon hit the real economy: the Association of Importers and Traders warned of an immediate 35% plunge in sales at the country’s major retailers. With money blocked and inaccessible, domestic consumption ground to a 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 distinctive fluorescent green design, the institution prided itself on having buried the heavy bureaucracy of the 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 boasting of an ambitious 100 million dollar capitalisation plan. However, behind the advertising facade and its patronage of sport, the Superintendence of Banks uncovered a harsh and unsustainable reality in its books: the institution was unable to meet a legal reserve requirement of 70 million dollars (62.427 million euros) demanded by the central bank. The financial collapse was a matter of numbers; the subsequent explosion, 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 on a promise to turn the country into a magnet for foreign capital. Although under his leadership Paraguay has recorded 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 administration.
