Paraguay’s Ousted President Santiago Peña Arrested Over Bank Collapse Scandal

Former Paraguayan President Santiago Peña has been arrested and charged following his impeachment over a banking crisis that left millions of people unable to access their savings.

Peña was removed from office on Friday, November 6, 2026, after the country’s Senate unanimously found him guilty of misconduct in office amid growing controversy surrounding the collapse of Ueno Bank.

He was subsequently placed under house arrest before being taken into custody on Saturday, November 7, following his appearance before prosecutors.

According to reports, prosecutors accused the former president of breach of trust and mismanagement for personal gain. He is also being investigated over allegations that he used his presidential influence to channel government funds into the troubled financial institution.

The banking crisis erupted after Paraguay’s central bank took control of Ueno Bank over concerns about its financial stability, triggering widespread protests and leaving millions of customers temporarily unable to access their money.

Reports indicated that the bank held accounts for nearly half of Paraguay’s population, while hundreds of millions of dollars in government funds were also reportedly deposited with the institution.

Peña, who assumed office in 2023, previously held shares in Ueno Holding, the parent company of the bank, before reportedly selling them in April 2025.

Prosecutors are also investigating allegations of conflicts of interest involving the appointment of a former Ueno Bank executive to head Paraguay’s central bank.

However, Peña’s lawyer, Ricardo Preda, has denied the allegations against his client, arguing that the president did not have the authority to determine where government funds were deposited.

Following Peña’s removal, Vice-President Pedro Alliana was sworn in as the country’s new president and is expected to complete the remainder of the presidential term, which ends in 2028.

The development has plunged Paraguay into one of its most significant political and financial crises in recent years, as authorities continue investigations into the circumstances surrounding the bank’s collapse.