Ueno says its customers number about 3 million, roughly 60% of Paraguay's adult population, though Paraguayan press counts put the number of account holders nearer 1.7 million. It was also holding between $800 million and $850 million in public money, including about $380 million from the state pension and health fund, known as IPS. The central bank's own criminal complaint alleges that Ueno made large unsecured loans to companies inside its own corporate group and used new borrowing to cover repeated overdrafts, and describes an allegedly simulated $74.4 million sale of loans meant to hide that exposure, according to Diario HOY.

The political problem is that Peña was a business partner of Ueno's owners until March 2025. The bank belongs to Grupo Vázquez, and Peña held shares in its holding company until an extraordinary shareholders' assembly cancelled his stake that month. He said in April 2025 that he was never a shareholder or investor in the bank itself, and Ueno says the same. He also appointed Carlos Carvallo to run the central bank in 2023, after Carvallo had chaired Ueno's predecessor, Financiera Ueno, until mid-2023. The central bank says Carvallo recused himself from every Ueno decision.

The warnings were not hidden. In June the central bank told Ueno it was lending too much to companies tied to its owners. In September the regulator opened an administrative investigation, and senators from Peña's own Colorado Party and the opposition began demanding that he replace the bank's leadership. On Oct. 29, the same day a central bank board member, economist Carmen Marín, resigned, Ueno announced a $100 million capital plan. Fitch had already moved its outlook on the bank to negative. Peña, for his part, repeatedly dismissed concerns about Ueno's finances and accused the media of fearmongering.

Once the bank went under, the central bank's own president became the first casualty. Peña said he asked Carvallo to resign. Carvallo said he had signed his resignation but would stay to oversee the takeover, because "the central bank needs calm to do its job." Peña has nominated Raúl Vera Bogado to replace him, subject to congressional approval.

Prosecutors ordered the arrest of eight people, including Ueno President Juan Manuel Gustale and chief executive Federico Miguel Vázquez Villasanti, and by Tuesday afternoon two more directors were in custody. By Wednesday evening a judge had accepted charges against 27 people, and prosecutors asked for pretrial detention for principal shareholder Miguel Vázquez and house arrest for seven other detained executives. Hearings for the eight were set for Thursday. Adjustments to Ueno's accounts exposed a shortfall of more than 1.6 trillion guaraníes (about $260 million) in funds set aside for losses, and the bank admitted it could not replenish $70 million in required reserves, per ABC Color.

Depositors took to the streets within hours. On Wednesday, a second day of protests, hundreds of savers, retirees, students and workers filled central Asunción near the Panteón de los Héroes, ABC Color reported. They demanded the immediate removal of Peña and Vice President Pedro Alliana. 

"We demand the immediate removal of the President and the Vice President," one protester said [translated], adding that "this is not going to end today." 

Another told the paper: "They hit the people's pocket and we cannot allow that."

Police used a water cannon and tear gas near Congress after what they said was an attempt to breach a security barrier, according to Última Hora. Some protesters said they would spend the night in the plaza next to the legislature.

Opposition lawmakers filed an impeachment request against Peña backed by 35 signatures, accusing him of conflicts of interest and failures of oversight and citing both his stake in Ueno's holding company and the Carvallo appointment. The Chamber of Deputies scheduled an extraordinary session for Thursday at 10 a.m. to take it up, with a separate request against Alliana to follow. That is a long shot, since Peña's Colorado Party controls both chambers, but dissident Colorado legislators are among those who presented it, and one of the party's vice presidents has called for Peña's expulsion. The presidency denied rumors Wednesday night that he was resigning.

Peña canceled a trip to an international summit in Spain, promised that "those responsible will have to answer to the courts, without exceptions or privileges," and agreed with congressional leaders to fast-track a law to speed payouts. A central bank guarantee fund covers up to about $38,000 per person, which preliminary estimates say fully protects roughly 97% of Ueno's depositors. Above that, the regulator has promised only "the greatest possible protection." Senate President Basilio Núñez, who has defended Peña and blamed the central bank, acknowledged that the Senate's first version of the law included a provision that cannot work while Ueno is in resolution, and the text is being amended.

The state pension fund says pensions will be paid as usual. IPS is moving about 32,000 retirees who collect through Ueno to another bank and plans legal action to recover its money. BNO's local sources put its exposure at about $355 million, 9% of its investment portfolio, a figure that differs from the roughly $380 million other reports give.

The collapse also impacts the narrative that Paraguay has been peddling to investors. The landlocked country won its first investment-grade ratings only recently on low taxes, light regulation and stability. It also ranked 150th of 182 countries in Transparency International's 2025 corruption index, tied with Bangladesh and the Central African Republic. Peña cannot seek reelection in 2028, and the crisis has already deepened a succession fight inside his party: Alliana had conditioned his own candidacy on the central bank clearing up doubts about the financial system.