Paraguay bank collapse sees president impeached, arrested

Pedro Alliana has become president of Paraguay following the impeachment of his predecessor Santiago Peña over a banking crisis that left almost half the country unable to access their accounts.

Senators appointed Mr Alliana, the former vice president, shortly after voting to remove Mr Peña yesterday over the collapse of Uneo Bank, with which he had links.

Senate President Basilio Núñez declared Mr Pena "guilty of poor performance in his duties" after 44 out of 45 senators voted in favour of impeachment, with with one voter absent.

Hundreds of people waiting outside Congress celebrated his impeachment.

"Justice has been done. Now we want him to give us back our money and go to jail," Jessica Aquino, 32, told reporters.

Paraguayan authorities placed the former leader under house arrest minutes after his removal, prosecutor Silvia Margarita Gonzalez Vester said.

The new president promised not to abandon the almost three million depositors, including pensioners, affected by Ueno Bank's takeover amid insolvency concerns.

"Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated," said Mr Alliana, who will serve as president until 2028.

Opposition politicians had also filed a motion to impeach Mr Alliana over the crisis, but the request failed to gain congressional approval.

The bank's collapse brought thousands of people onto the streets demanding repercussions for the US-backed president, who until last year had a stake in Grupo Vazquez, which controlled Ueno Bank.

Advance payments to an unspecified number of impacted depositors began on Thursday afternoon, according to a Central Bank official.

The first phase of payments, up to around $1,600 (€1,435), will go to clients who do not have loans and have an account at another bank or institution in Paraguay to receive the funds, said Jose Maciel of the Central Bank's Deposit Guarantee Fund.

The next beneficiaries "will be announced progressively over the course of the payment process", he added.

The opposition accused Mr Pena of a conflict of interest, which he denied.

Mr Pena had offered his resignation over the disaster, but government members pressed ahead with impeachment proceedings that have stripped him of political immunity.

The Attorney General said it was investigating him for "acts related to the supervision and resolution of Ueno Bank SA and the placement of public funds in said entity".

He will be questioned over alleged crimes of breach of trust, influence peddling and misappropriation of funds, Ms Vester said.

Mr Pena urged reconciliation in a post on X shortly before his removal.

"Today, we must come together as Paraguayans to rebuild our institutions and restore trust," he said.

Ueno Bank sponsors several first division teams as well as the national team.

"We were also victims of this situation," members of the national team said in a statement on X.