A few weeks ago, I wrote an article highlighting the political composure and courage of Santiago Peña’s government in Paraguay. I commended the administration for aligning itself with Washington’s hemispheric security doctrine and for supporting Western allies — such as Israel and Taiwan — during a period of heightened international tension.

At the same time, I noted the growth of the economy and the increasing interest among foreigners in relocating not only their businesses to this South American nation but their families as well.

Then, earlier this month, that tranquility and stability were blown apart — not because of Asunción’s foreign policy, nor due to any faltering in an economy that even CNN once hailed as a “star” in South America. Instead, the country was thrown into turmoil by allegations of corruption involving the Grupo Vázquez conglomerate and Banco Ueno.

The situation involves a complex web of political figures, various movements, and questionable financial practices. In the immediate aftermath, the closure of the bank has sparked protests from depositors and placed the Peña administration under intense pressure.

In recent years, Ueno experienced extraordinary growth, rising to the top tier of Paraguay’s banking sector. Out of the country’s population of nearly 6.5 million, approximately three million were clients of the bank.

This expansion was fueled by a surge in credit operations extended to companies linked to the bank’s own owners — the Grupo Vázquez — a group with which several current Paraguayan public officials have had past ties.

This has become the primary focus for both the press and the public prosecutor’s office: various state institutions had deposited significant sums of money into Ueno. These include the Social Welfare Institute — which oversees the national social security system — the National Electricity Administration, and the National Telecommunications Commission.

According to data published by Reuters, as of last June, Ueno held approximately $850 million in public funds. On November 2, however, no one could have foreseen that the Central Bank of Paraguay would initiate resolution proceedings for Banco Ueno. Authorities had discovered that the bank’s solvency had fallen below legal minimums — a fact the company itself had kept strictly under wraps.

The institution was placed under intervention, and as a result, millions of customers faced difficulties accessing their deposits. Investigations point to potential irregular loans granted to companies linked to the Vázquez Group, as well as shortcomings in banking supervision.

The situation soon escalated. The crisis at this specific financial institution directly implicated President Peña. Investigations are currently underway to determine whether his alleged ties to the bank’s business circle influenced decisions regarding public funds deposited with the institution.

In this context, it is worth noting the integrity shown by Peña’s own party, the Colorado Party. When the president attempted to resign on November 5, 2026, his own political party blocked the parliamentary process.

According to analyst Carlos Ruckauf, this was done because, under the law, a president who resigns automatically becomes a senator for life. Bloomberg reported that this status would have granted him constitutional immunity, making it difficult to initiate immediate criminal proceedings against him.

Although the charges against Peña — who was ultimately removed from office following an impeachment trial approved by a unanimous vote — remain to be proven, the Colorado Party chose the difficult and unusual path of virtue. They prioritized the rule of law and order in the Republic over shielding one of their own. On November 10, they expelled him from the party.

Vice President Pedro Alliana assumed the presidency on an interim basis, and today, November 12, the Paraguayan Public Prosecutor’s Office searched the presidential residence as part of the ongoing investigation. Furthermore, according to the Associated Press, authorities have brought charges against Peña — who maintains his innocence — involving potential conflicts of interest, influence peddling, and irregularities in the management of public resources.

Undoubtedly, corruption is a cancer that eats away at the foundations of societies with development potential; it can also compromise peace and institutional integrity. Although tensions have yet to subside on the streets, and there is pressure on the financial system, Paraguayan institutions appear capable of weathering the collapse of Banco Ueno and the crises that have followed. Hopefully, they will endure.