Paraguay President Santiago Peña Impeached and Placed Under House Arrest After Bank Collapse

Paraguay’s President Santiago Peña was impeached and placed under house arrest on Friday, 6 November 2026, hours after the country’s Senate voted overwhelmingly to remove him from office over a banking scandal that left about three million people unable to reach their savings.

Forty-four of the Senate’s 45 members voted to remove Peña, with one senator absent. His vice-president, Pedro Alliana, was sworn in as president on Friday and will serve out the remainder of Peña’s term, which ends in August 2028.

A bank collapse that froze a nation’s savings

Regulators seized Ueno Bank on Tuesday, 3 November, cutting nearly three million customers off from their savings, pensions and bank cards. The digital lender’s collapse set off the deepest political crisis in Paraguay in more than a decade.

The bank had close ties to Peña’s private business interests. He held shares in the company that owned Ueno until last year, when he sold them under political pressure, and he appointed a former Ueno executive to lead the central bank that regulated the lender.

What senators accused Peña of doing

The impeachment charges alleged conflicts of interest, manipulated regulatory oversight, diverted pension funds and an institutional cover-up involving the central bank. Prosecutors ordered Peña held at home until he can appear before the economic crimes and anti-corruption unit, the Associated Press reported.

Peña has denied any wrongdoing. He is due to be questioned on Saturday, 7 November, by prosecutor Silvia Margarita Gonzalez Vester over allegations of breach of trust, influence peddling and misappropriation of funds.

The order also called for the arrest of Carlos Carvallo, the former central bank chief Peña appointed. Prosecutors have charged 27 people in connection with the bank’s collapse, including Ueno’s controlling shareholder, Miguel Vázquez, and six bank directors are in pretrial detention.

A three-day fall from power

Impeachment proceedings began on Wednesday, 4 November. Peña offered to step down on Thursday, but lawmakers pressed ahead with a trial instead, a choice with lasting consequences for him: removal stripped him of the lifetime Senate seat granted to former presidents and the parliamentary immunity that comes with it.

The speed of the fall was striking even by Paraguay’s standards. Peña, a member of the conservative Colorado Party, had taken office in August 2023, and his removal is the first of a Paraguayan president since Fernando Lugo was ousted in 2012.

The upheaval in Asunción comes in a week of leadership shake-ups across the Americas, including a White House chief-of-staff change in Washington and the Democrats’ midterm sweep that reshaped the balance of power in the US Congress.

What happens next in Asunción

Alliana, 52, a veteran of the Colorado Party, takes charge of a country still counting the cost of the bank failure. His first task will be restoring confidence in a banking system that left millions locked out of their money.

Peña’s questioning on Saturday will be the first public test of the case against him. Prosecutors have signalled that further arrests could follow as the investigation into Ueno Bank widens.

How the crisis unfolded