Paraguay President Santiago Peña resigns after bank collapse

Paraguay’s President Santiago Peña has announced his resignation following a political crisis sparked by the collapse of a bank linked to him. “I want to apologise to the people if at any point I failed,” he said in a video message on social media. “It was never my intention to betray the trust you placed in me.” The crisis erupted after Ueno Bank entered an insolvency process, which froze all operations.

Lawmakers accused Peña, a shareholder in the company that owned the bank until last year, of conflicts of interest and misconduct. Peña rejected suggestions of impropriety. His resignation came as Paraguay’s lower house of congress voted in favour of pursuing an impeachment trial. Photos taken near Paraguay’s Congress building on Thursday show police officers clashing with protesters demanding Peña be removed from office.

Paraguay’s congress must approve the resignation of a president. But a special session convened on Thursday to address his resignation was adjourned in favour of continuing with the impeachment process. Congress has scheduled a special session for Friday, when Peña is expected to present his defence, according to Reuters news agency. In a post on X, Peña confirmed he would appear for Senate impeachment proceedings, adding that he would do so to “exercise my right to a defence”.

He wrote: “I will provide the information requested of me. Citizens deserve to know the truth, without cover-ups and without anyone being above the law.” Peña earlier said his resignation was to protect stability, social peace and democratic institutions. Ueno Bank has said it has about three million customers, equivalent to about 60% of Paraguay’s adult population.

It held pensions and some other public funds and, after its collapse earlier this week, millions could not access their accounts. The central bank seized the digital lender, and people took to the streets protesting and demanding Peña’s resignation. A new president of the Central Bank of Paraguay has been appointed and Congress has approved a process to pay depositors.

Protesters gathered near the Paraguayan Congress on Thursday Peña won the 2023 election representing Paraguay’s ruling conservative Colorado Party, beating a centre-left challenger. The Colorado Party dropped impeachment proceedings against Vice President Pedro Alliana, who is next in line for the presidency after Peña.