Paraguay’s central bank took over Ueno Bank on Tuesday after the lender’s solvency ratio fell below 50% of the legal minimum, according to MercoPress. The central bank also froze all of the bank’s assets and liabilities. The Ueno Bank Paraguay takeover affects about 3 million customers, and the bank’s chief, Carlos Carvallo, resigned the same day.
Carvallo submitted his resignation on Tuesday at the request of President Santiago Peña, according to the Straits Times. He will remain in office during the bank’s resolution proceedings, the Straits Times reports.
The Deposit Guarantee Fund covers savings up to 75 minimum wages, about US$38,200 per person, according to MercoPress. Peña announced an agreement with congressional leaders to fast-track a bill that would authorize use of the national Guarantee Fund to pay depositors, the Straits Times reports. Deposits above the guarantee limit await the Superintendency of Banks’ final accounting, and no timeline has been given.
Paraguay’s prosecutor’s office has requested a criminal investigation into the events surrounding Ueno and ordered the arrests of eight people linked to the bank, according to the Straits Times. MercoPress cites Paraguayan press reports of several detained executives, including president Miguel Vázquez. Neither outlet has confirmed the detention count.
Vice President Pedro Alliana has "paused" his bid for the ruling Colorado Party’s presidential nomination to "put the house in order," according to MercoPress.
Carvallo ran Ueno Bank before Peña appointed him to head the Central Bank in 2023, MercoPress reports. In 2024, the Social Security Institute’s purchase of about US$32 million in Ueno bonds caused controversy, and Peña called the reports a "media campaign," according to MercoPress. Ueno is majority-owned by Grupo Vázquez and grew from a niche fintech into a mid-tier bank, the Straits Times reports.
The outlets disagree on how much public money Ueno held. MercoPress reports more than US$800 million in public funds, while the Straits Times reports about $850 million administered by the bank. The two also differ on when Peña’s ties to the group ended. MercoPress says he was a shareholder in Ueno Holding, not the bank, and sold those shares in April 2025. The Straits Times says he was a business partner of the group that owned the bank until March 2025.
Grupo Vázquez and Ueno did not immediately respond to requests for comment, the Straits Times reports. Key facts in this story rely on two outlets, MercoPress and the Straits Times, and the ABC Color quotation reaches this story only secondhand through MercoPress.
The Superintendency of Banks will appoint auditors to verify Ueno’s asset position, and congress will consider the fast-track bill on depositor payments. The prosecutor’s criminal investigation continues. The opposition has said it will push impeachment proceedings against Peña and Alliana.
Sources
This article was written with AI assistance from the published reporting listed above. It is part of the World Brief daily news podcast.