Paraguay Congress Rejects President Santiago Peña’s Resignation as Senate Impeachment Trial Resumes After Ueno Bank Collapse

Introduction

Paraguay’s political crisis took a turn on Thursday, November 5, 2026, that almost nobody in Asunción had predicted when the day began. In the morning, President Santiago Peña announced that he was resigning over the collapse of Ueno Bank, the digital lender whose failure had frozen the accounts of about three million people. By the end of the day, his resignation had not taken effect, he was still president, and the Senate had opened an impeachment trial that could remove him from office anyway. Congress had refused to accept the resignation he had offered, and the decision now rests with the Senate. The reversal exposed the deep split inside Paraguay’s ruling Colorado Party, set up a trial that could conclude within a day, and left millions of depositors waiting to learn when they will see their money again. What follows is the full account of how Paraguay Congress rejects Pena resignation Senate impeachment trial November 2026 unfolded, and what happens next.

1. THE RESIGNATION THAT NEVER TOOK EFFECT

1.1 The video message on Thursday

Santiago Peña announced his resignation on Thursday in a video message posted on X, saying that he was stepping down in the interest of national stability. The announcement came as the Chamber of Deputies was debating a request to impeach him over the closure of Ueno Bank, and it landed only two days after the Central Bank of Paraguay had seized the lender and frozen its deposits. The president of Congress, Colorado Senator Basilio Núñez, had publicly demanded that Peña resign, and the resignation message appeared designed to bring the crisis to a quick and orderly end. Instead, it opened a new and more confusing chapter. Within hours, the Chamber of Deputies approved the impeachment charges against him unanimously, and a joint session of Congress called to accept his resignation collapsed without reaching a decision. The resignation, announced with such apparent finality in the morning, had no legal effect by nightfall. Peña remained in office, not because he had changed his mind, but because Congress had not accepted what he offered. The episode left Paraguay with a president who had tried to quit and a legislature that insisted on putting him on trial instead, a combination that has few parallels in the country’s recent democratic history.

1.2 The 78-0 impeachment vote

While Peña’s resignation announcement was still circulating, the Chamber of Deputies approved the impeachment charges against him by 78 votes to none. The measure had been filed by 35 opposition and dissident ruling-party deputies and was backed by the Colorado Party bench, a breadth of support that underlined how far Peña’s standing had fallen inside his own party. Opposition lawmakers said the vote was deliberate and strategic: they argued that if the resignation had been accepted, Peña would have kept his immunity and special protections and preserved his eligibility to become a senator for life. Impeachment and removal, by contrast, would strip him of those protections and leave him exposed to prosecution. The lower house’s unanimous vote therefore served two purposes at once. It was a formal accusation against a president blamed for the bank collapse, and it was a procedural block against an exit that his critics regarded as too comfortable. The vote also sent the case to the Senate, where the trial would decide his fate. Deputies rejected a similar impeachment motion against Vice President Pedro Alliana, with 48 votes against and 30 in favour, a result that kept the constitutional line of succession intact and meant Alliana would take office if Peña were removed.

2. THE JOINT SESSION THAT LOST ITS QUORUM

2.1 The Colorado walkout

The decisive moment of the day came not in a vote but in an empty chamber. A joint session of Congress was called to accept Peña’s resignation, but it ended without a quorum after lawmakers from his own ruling Colorado Party walked out of the session rather than let the vote proceed. Colorado senators had said they would reject the resignation and insist on a trial, and the walkout made sure the session could not reach a decision at all. With the resignation unresolved, Peña remained president. Reporting on the session described confusion in the chamber as the resignation, the impeachment vote and the walkout collided within hours of one another. The walkout was striking because it came from the president’s own party, not from the opposition. It suggested that the Colorado Party’s leadership had decided that a trial, with all its risks, served their interests better than a quiet resignation. It also meant that the constitutional question of whether a president can resign while facing impeachment was left unanswered, at least for the moment, and that the Senate trial became the only live route to deciding Peña’s future.

2.2 Why rejection mattered more than acceptance

The difference between accepting the resignation and rejecting it is the difference between two very different futures for Santiago Peña. Had Congress accepted his resignation, he would have left office on his own terms, kept his immunity and special protections, and preserved his eligibility to become a senator for life, a position that carries influence and legal shelter in Paraguay. By refusing to accept it, Congress kept him in office and exposed him to a Senate trial that could remove him and bar him from that lifetime seat. Opposition senators argued openly that he must face justice rather than walk away, and the Senate pressed ahead with a trial that could remove him from office. The stakes extend beyond Peña himself. A resignation would have closed the political crisis quickly and handed power to Vice President Alliana. A trial keeps the crisis open, forces a public airing of the charges, and ties the outcome to the criminal investigations now under way. It also creates a new risk: if the Senate fails to reach the two-thirds majority needed to remove him, Peña could remain in office despite having offered to resign, a weakened president leading a country whose banking system has just suffered its worst shock in years.

3. THE SENATE TRIAL OPENS

3.1 Thursday night’s first session

The Senate opened the impeachment trial on Thursday night, only hours after the lower house had voted and the joint session had collapsed. Deputies serving as prosecutors presented the charges, and the trial moved with a speed that reflected the urgency of the crisis. The Senate’s president, Basilio Núñez, said the trial could conclude the same day it resumes, a timetable that would make it one of the fastest presidential trials in Paraguay’s history. The speed is possible because the facts of the bank collapse are already public and documented by the central bank, and because the political positions of most senators were already clear before the trial began. But speed also carries a cost. A trial conducted in a single day leaves little room for new evidence, for witnesses, or for the kind of deliberation that a case of this gravity would normally receive. The Thursday night session established the framework: the charges were formally presented, the prosecution’s case was outlined, and the president was summoned to answer. What remained was the defence, and the vote.

3.2 The Friday defence and the 30-vote threshold

Peña was summoned to present his defence before the Senate on Friday at 10 a.m., and he said on X that he would appear and exercise his right to a defence. Removal from office requires the votes of 30 of the 45 senators, a two-thirds majority that sets a high bar for conviction. The threshold matters because it means the trial’s outcome is not a foregone conclusion, even after the lower house’s unanimous vote. Senators who supported the impeachment charges in principle may still hesitate at removal, and the Colorado Party’s own divisions could decide the result. If the Senate votes to remove him, Vice President Pedro Alliana takes office. If it does not, Peña stays, but as a president who has already offered to resign and been refused, leading a government whose authority has been badly damaged. Peña also urged that the steps to return frozen Ueno Bank deposits should continue independently of his fate, a plea that acknowledged that millions of depositors cannot wait for the political crisis to resolve itself. The defence hearing on Friday morning is therefore the hinge of the whole crisis: it is the moment when the president speaks for himself, and the moment after which the Senate must choose.

4. THE BANK AT THE CENTRE OF THE CRISIS

4.1 How Ueno fell below the solvency line

At the centre of the crisis is Ueno Bank, one of Paraguay’s largest lenders and its biggest digital bank, with about 2.8 to 3 million customers, equivalent to around 60 percent of the country’s adults. The Central Bank of Paraguay opened a resolution procedure against Ueno on Tuesday, November 3, after finding that its solvency ratio had fallen below half of the legal minimum required. The central bank’s investigation found that Ueno’s capital had fallen to less than half of the legal minimum after corrections to its accounts revealed poorly documented lending to companies linked to its owners, as well as expenses wrongly counted as assets. Reporting on the failure has also described unsecured loans to internal corporate groups and simulated sales used to mask the bank’s true exposure. The scale of the accounting problems explains why the central bank moved so abruptly, and why its president, Carlos Carvallo, resigned immediately after pulling the plug on the country’s largest digital bank. The seizure was not the result of a slow decline that regulators had watched for months. It was the consequence of a sudden recognition that the bank’s books did not reflect its real position, and that its capital cushion had effectively vanished.

4.2 Three million customers locked out

When the central bank seized Ueno Bank on Tuesday, its app, its cards and its transfers immediately went dark, leaving desperate depositors queuing outside locked branches. The collapse locked out up to three million customers, almost half of the country’s population, and froze savings, salaries and business payments across Paraguay. For a digital bank, the shutdown was total: there were no branches to visit for most customers, no working cards, and no way to move money. The human consequences were immediate. People who had kept their wages, their pensions and their small businesses’ operating funds in Ueno suddenly could not pay for food, medicine or transport. Street protests followed, and public confidence in Peña’s handling of the economy collapsed along with the bank. The crisis is Paraguay’s gravest political crisis in years, and it is also a financial crisis for ordinary families who had trusted a bank that marketed itself as the modern, convenient face of Paraguayan finance. The question that now dominates everyday conversation in Asunción is not only who is to blame, but when the money comes back.

5. THE CRIMINAL INVESTIGATIONS

5.1 Three inquiries and what they cover

Attorney General Emiliano Rolón Fernández has opened three criminal investigations into Peña and other current and former officials, examining the supervision of Ueno Bank, the handling of its failure, and the placement of public funds in the lender. The investigations run in parallel with the impeachment trial, and they raise the stakes of the Senate’s decision considerably. A president who is removed by the Senate loses his immunity and faces prosecution as an ordinary citizen. A president who survives the trial still faces the investigations, but from a stronger legal position. The three inquiries cover distinct questions. The first concerns how the bank was supervised, and whether regulators missed warning signs or failed to act on them. The second concerns the handling of the failure itself, including the decisions made in the days before the seizure. The third, and potentially the most damaging, concerns the placement of public funds in Ueno, including pension money, and whether state money was put at risk in a bank whose accounts were unreliable. The investigations are at an early stage, and no charges have been reported against any individual in connection with them. But their existence is a central reason why the opposition insisted on a trial rather than a resignation.

5.2 The public money question

The most politically explosive question in the Ueno collapse is how much public money was in the bank when it failed. Reports have put the figure at about 850 million dollars, including pension money, though other accounts have given a lower figure of about 800 million dollars, and the exact total has not been confirmed. The discrepancy matters because it determines how much of the loss falls on the state, and how much of the pension system is exposed. The prosecutor’s investigations are reported to be examining the placement of public funds and the bank’s ties to state bodies such as the IPS, the social security institute. If public funds were placed in Ueno on terms that ignored its true financial condition, the scandal reaches beyond a private bank failure and into the management of the state’s own money. Peña was a shareholder in Ueno Holding until April 2025, a connection his critics have highlighted, although no finding has been reported linking that shareholding to the bank’s failure. The public money question is also the reason the depositors’ anger has a political edge: it is not only savers who lost access to their funds, but citizens who suspect that their own taxes and pension contributions were put at risk.

6. THE DEPOSITORS WAITING FOR THEIR MONEY

6.1 The emergency law and the 24-hour advance

Congress has already passed an emergency law to speed the early return of deposits, which Peña signed on Wednesday, and the Senate has approved a reform to the deposit guarantee law that would let customers of Ueno Bank receive an advance within 24 hours of its resolution. The measures are the most concrete response so far to the depositors’ plight, and they were designed to get at least some money back into people’s hands quickly, even while the full scale of the losses is still being counted. The 24-hour advance is a recognition that the normal deposit guarantee process would be far too slow for families who cannot wait weeks or months to buy food. But the measures also raise questions that have not yet been answered. It is not yet clear how large the advances will be, how many depositors will qualify for them, or how quickly the system can actually pay them. The emergency law was passed before the political crisis reached its peak, and its implementation now depends on a government and a central bank that are both in turmoil. For depositors, the law is a promise that has yet to be tested.

6.2 Queues, protests and lost confidence

The human face of the crisis is the queue outside a locked branch, the small business owner who cannot pay suppliers, and the pensioner who cannot withdraw savings. Street protests have followed the collapse, and the anger is directed as much at the government as at the bank. Public confidence in Peña’s handling of the economy has been badly damaged, and the protests have given the crisis a street dimension that the impeachment trial alone cannot resolve. The scale of the disruption is hard to overstate: with about three million customers affected, almost every family in Paraguay knows someone who has lost access to money. The protests are not only about the bank. They are about a sense that the institutions meant to protect ordinary savers failed, and that the people responsible have not yet been held to account. That sense of grievance is likely to persist whatever the Senate decides, because a trial can remove a president but cannot by itself restore a bank, repay depositors, or rebuild trust in the financial system. The protests will be a measure of whether the political resolution is accepted as just.

7. THE POLITICS BEHIND THE WALKOUT

7.1 Peña, Cartes and the Colorado Party

Santiago Peña is 47 years old, a former IMF economist who has been in office since August 2023, and his presidency has been closely tied to the Colorado Party’s dominant figure, former President Horacio Cartes. Cartes has withdrawn his support for Peña, a break that helps explain why the president’s own party walked out of the joint session rather than accept his resignation. The Colorado Party has governed Paraguay for most of the democratic era, and its internal politics have often mattered more than the opposition. The walkout suggests that the party’s leadership calculated that a trial, which they could influence through their Senate majority, offered more control over the outcome than a resignation, which would have handed power to Alliana immediately and on terms they did not choose. Núñez, the Congress president who publicly demanded Peña’s resignation, is himself a Colorado senator, and his role illustrates how the crisis has split the party between those who want Peña gone quickly and those who want him tried. The party’s divisions will be tested again in the Senate vote, where the 30-vote threshold means that the outcome depends on how Colorado senators vote.

7.2 Alliana and the succession question

Vice President Pedro Alliana is the figure who stands to gain most from the crisis, and also the figure whose position is most uncertain. If the Senate removes Peña, Alliana takes office as president. The deputies’ decision to reject an impeachment motion against Alliana, by 48 votes to 30, kept that succession path open and signalled that the lower house did not regard him as part of the bank scandal. But Alliana’s future is not settled. He was closely associated with Peña’s government, and his own role in the events surrounding Ueno has not been the subject of the same scrutiny as the president’s. If he takes office, he will inherit a banking crisis, a deposit guarantee problem, and a governing party in open division. If Peña survives the trial, Alliana remains vice president in a government that has already tried to resign. Either way, the succession question will shape Paraguayan politics for the rest of the presidential term. The trial is therefore not only a judgment on Peña. It is a decision about who leads Paraguay through the aftermath of its worst banking failure, and about whether the Colorado Party can hold together long enough to govern.

8. WHAT REMAINS UNCONFIRMED AND WHAT TO WATCH NEXT

8.1 The trial’s outcome

The most important unconfirmed fact in Paraguay is the outcome of the Senate trial. Removal requires 30 of the 45 senators, and the votes have not yet been counted. The lower house’s unanimous vote does not guarantee a Senate conviction, and the Colorado Party’s divisions mean the result cannot be predicted with confidence. The criminal investigations are also at an early stage, and no charges have been reported against Peña or any other individual in connection with them. The exact total of public funds placed in Ueno Bank has not been confirmed, with reported figures differing between about 800 million and 850 million dollars. The deposit recovery total and the timeline for returning money to all depositors have not been confirmed either, and the size and timing of the advances promised under the emergency law remain to be tested. Peña’s own future, including whether he could face a renewed attempt to accept his resignation if the trial fails, is unconfirmed. Each of these questions will be answered in the coming days, and each of them could change the shape of the crisis.

8.2 What to watch next

The first thing to watch is the defence hearing on Friday at 10 a.m., when Peña is due to present his case to the Senate, and the vote that could follow on the same day. The second is the deposit guarantee process, and whether customers actually receive advances within 24 hours as the Senate’s reform promises. The third is the criminal investigations, and whether the Attorney General announces charges or findings that change the political calculation. The fourth is the street, where protests will show whether the public regards the trial’s outcome as just. And the fifth is the Colorado Party itself, and whether its senators vote as a bloc or split in a way that reveals the depth of the division. Paraguay has been here before in its democratic history, with presidents forced from office by Congress, but rarely with a president who offered to resign and was refused, and rarely with a banking collapse of this scale behind it. The coming days will provide the answers, and the trial on Friday is where they begin.

Comments

comments