Paraguay's Senate dismissed President Santiago Peña on Friday due to a banking crisis that had deprived millions of access to their deposits.
Reasons for Dismissal
Senators voted overwhelmingly to dismiss Peña for misconduct in office. This action paved the way for the succession of Pedro Alliana, the Vice President, who will serve for the remainder of Peña's presidential term, which lasts until August 2028.
Peña had resigned on Thursday, but with his dismissal and trial instead of accepting his resignation, senators stripped him of his permanent Senate seat and immunity granted to former presidents, exposing him to legal prosecution.
Consequences of the Banking Crisis
Following the vote in Paraguay's Senate, prosecutors issued arrest warrants for Peña and Carlos Carvalho, the former head of the Central Bank, as part of a criminal investigation. Peña's sudden downfall came amid increasing pressure following the collapse of his digital lender, Ueno, one of the largest banks in the country, with which he was associated.
Accounts at this bank, which was also used for processing retirement payments, were frozen, and millions of customers were unable to access their money. Ueno also held hundreds of millions of dollars in public funds.
Peña's resignation followed a lack of support from the President of Congress, Basilio Núñez, and the leader of the ruling conservative party, Horacio Cartes. 35 opposition representatives and some members of the ruling party presented impeachment articles in the House of Representatives with 80 seats, accusing Peña of conflict of interest and misappropriation of retirement funds.
Peña sold his shares in Ueno Holding, which includes this bank, in April 2025. Lawmakers also referenced two loans he had received from Ueno as part of the allegations of financial misconduct.
They also pointed to Peña's improper intervention in the Social Security Institute (IPS) and granting favors to Ueno. IPS manages the retirement funds and healthcare for most workers in Paraguay and had about $355 million in this bank, which is nearly 9% of its investments.
