Paraguay’s ousted president ordered detained over bank collapse as financial crisis deepens
ASUNCION — A Paraguayan court ordered the preventive detention of ousted President Santiago Pena on Saturday after prosecutors filed criminal charges against him in connection with the collapse of Ueno Bank, which has frozen the deposits of nearly half the country’s population.
Judge Humberto Otazu ruled that Pena must remain in custody at the Presidential Escort Regiment headquarters in the capital, Asuncion.
The decision came hours after the Prosecutor’s Office formally charged the former president with breach of trust, illicit enrichment through self-dealing and falsification of public documents.
Pena appeared before prosecutors at the State Attorney General’s Office, where he was questioned for nearly three hours before being returned to military police custody.
He was arrested late Friday at his private residence, where police intervened to disperse protesters gathered outside. He subsequently spent the night under guard at the Presidential Escort Regiment.
His detention followed a Senate trial on Friday in which lawmakers voted to remove him from office on grounds of “misconduct in office” and “poor performance of duties” over his administration’s handling of the financial crisis.
The crisis erupted on Nov. 3 when the Central Bank of Paraguay (BCP) intervened in Ueno Bank because of severe insolvency.
The bank’s collapse froze deposits belonging to approximately 2.94 million customers, nearly half of Paraguay’s population, including major public institutions and pension funds such as the state-run Social Security Institute.
The sudden loss of access to funds triggered widespread street protests in Asuncion, prompting police intervention.
Prosecutors allege that Pena’s administration authorized high-risk public deposits in the private bank beyond legally established safety thresholds, exposing public funds to the institution’s financial collapse.
Meanwhile, newly sworn-in President Pedro Alliana, who previously served as vice president and belongs to the ruling Colorado Party, began his first full day in office Saturday.
Alliana’s administration faces mounting pressure to fulfill promises of full compensation for affected depositors while taking urgent measures to stabilize Paraguay’s financial system.
Restoring public confidence and addressing the fallout from the banking crisis are expected to dominate the new administration’s immediate agenda as legal proceedings against Pena continue.
