Paraguay President Peña Faces Impeachment Trial and Criminal Probe Over Bank Collapse

Paraguayan President Santiago Peña is under criminal investigation and facing an impeachment trial following the collapse of a major digital bank, prosecutors announced. The crisis at Ueno Bank has turned Peña's long-ruling Colorado Party against him, a dramatic reversal for the former International Monetary Fund economist who until recently enjoyed broad political support.

On Thursday, Peña offered his resignation via social media, and the lower house of Congress voted unanimously to impeach him shortly after. However, both houses declined to accept his resignation, and the Senate decided to proceed with a trial that could result in his removal from office. Opposition senators are pushing for his removal rather than resignation, arguing that resignation would allow him to become a senator for life with legal protections that could shield him from prosecution.

Attorney General Emiliano Rolón Fernández has ordered three criminal investigations into the Ueno Bank crisis, including allegations involving Peña and other current and former government officials. The investigations will examine authorities' oversight of the bank, their handling of its failure, and the placement of public funds in the lender.

Peña has said he will cooperate with investigators. "Whatever the outcome of this process, I will act with responsibility and respect for the Constitution," he posted on X. Earlier, he said he was stepping down in the interest of "the stability of our country, social peace and the need to preserve our democratic institutions."

The bank's collapse has left millions of depositors, retirees, and workers scrambling to recover frozen savings and unpaid wages. Peña, who until last year held a stake in a company linked to Ueno, expressed contrition but did not accept responsibility for the turmoil. "I want to apologize to the people if I have failed them at any point," he said. "It was never my intention to betray the trust they placed in me."

If Peña is removed from office, Vice President Pedro Alliana would assume the presidency. The political crisis has drawn international attention, as Peña had been welcomed in Washington just weeks ago as a key ally. The outcome of the Senate trial and criminal investigations will be closely watched.