Paraguay's President Santiago Peña Impeached and Placed Under House Arrest Following Major Banking Scandal

On Friday, November 6, 2026, the Senate of Paraguay voted unanimously to impeach President Santiago Peña at the conclusion of an impeachment trial that held him responsible for the escalation of a major banking crisis affecting the savings of nearly three million depositors, equivalent to roughly half the country's population.

Decisive Impeachment Trial and Swearing-in of a New President

Senate President Basilio Núñez announced Peña's conviction for "malperformance of duties" with the approval of all 44 senators present out of 45, officially stripping him of his presidential mandate. The decision came despite Peña submitting his resignation on the eve of the session; however, parliament rejected it to prevent him from acquiring parliamentary immunity as a senator-for-life and to ensure his constitutional accountability.

Immediately thereafter, Vice President Pedro Alliana (52), belonging to the same ruling conservative Colorado Party, took the constitutional oath of office to assume the presidency—a post Peña was slated to hold until 2028. In his first speech before parliament, Alliana said: «Citizens experiencing extremely difficult circumstances due to this financial turmoil will be fully compensated, and we will not leave them alone.»

House Arrest and Judicial Investigations

Following the impeachment announcement, the Public Prosecutor's Office ordered Santiago Peña placed under house arrest at his residence. Public Prosecutor Silvia Margarita González Fuster confirmed that the ousted president will appear for questioning at the prosecutor's headquarters to face allegations regarding breach of trust, influence peddling, and fund management for personal gain.

Investigations and parliamentary charges had indicated that Peña, who was a shareholder until 2025 in the financial group that owns the digital bank "Ueno Bank," had authorized and transferred public pension funds to the collapsed bank, prioritizing private interests over the public interest.

A Banking Crisis Shaking the Street

The acute financial crisis erupted after the Central Bank of Paraguay (BCP) placed the digital Ueno Bank into receivership due to insolvency and default on payments, resulting in the freezing of accounts and savings of millions of individuals, as well as institutions, retirees, and businesses.

The impeachment decision was met with widespread celebrations and cheers outside the parliament building by hundreds of citizens carrying banners demanding the recovery of their savings and holding those involved accountable through imprisonment. In parallel with the judicial process, the Central Bank's Deposit Guarantee Fund began disbursing initial payments to affected depositors, targeting small deposit holders, with estimates indicating that around 700,000 affected individuals received initial amounts to mitigate the impact of the crisis.