Paraguayan President Santiago Peña announced his resignation as a banking crisis and political turmoil put his government under pressure. (Foto: Instagram)
Santiago Peña announced his resignation as Paraguay’s president on Thursday, Nov. 5, in a move that adds uncertainty to a regional network of conservative leaders. The crisis surrounding his departure followed the collapse of Ueno Bank, which served millions of customers and held public funds. It also brought scrutiny to ties between Peña’s government and the group that controls the bank. The leaders in this political landscape do not form a unified ideological bloc, but they share conservative priorities, opposition to the left and political affinity with President Donald Trump. In Argentina, Javier Milei faces political and economic difficulties. In Brazil, Flávio Bolsonaro was defeated by Luiz Inácio Lula da Silva in the 2026 presidential race and fled to the United States, interrupting the region’s pro-Trump momentum, according to the account.
The crisis began when the Central Bank of Paraguay intervened in Ueno Bank on Tuesday, Nov. 3. The regulator said the bank’s solvency ratio had fallen below the legal minimum of 50%, prompting it to suspend the bank’s operations. The move left nearly 3 million customers without access to financial services in a country of about 6.1 million people. Ueno Bank also held about $850 million in public deposits, including funds belonging to the Social Security Institute, known by its Spanish acronym IPS.
Investigations raised suspicions that the bank had made improper loans to companies connected to Grupo Vázquez, which controls the institution. Peña had been a shareholder in the group until March 2025, bringing the allegations into direct contact with his administration. The crisis took on a political dimension after Peña lost support within his own Partido Colorado. Former President Horacio Cartes, one of the party’s leading figures, backed political proceedings against Peña. Although Peña announced his resignation Thursday, the Chamber of Deputies unanimously approved moving forward with impeachment proceedings. The Senate summoned him to present his defense Friday, Nov. 6. Vice President Pedro Alliana is expected to take over the executive branch.
The upheaval affects a broader movement whose leaders pursue different political projects. Peña represented a more technocratic, liberal approach focused on attracting foreign investment, maintaining fiscal discipline and limiting state involvement in the economy. Milei, by contrast, is a leading proponent of economic ultraliberalism. He rose to power criticizing the traditional political establishment and calling for a smaller state. Peña was ideologically close to Milei, who has cited Paraguay as an economic model for the region. In El Salvador, Nayib Bukele represents a right-wing approach centered on tougher public security policies and fighting criminal groups. His model has gained international attention for mass incarceration and the suspension of constitutional guarantees during a state of emergency. In Chile, José Antonio Kast’s conservative politics emphasize fighting crime, controlling immigration and defending traditional values. In Brazil, Bolsonaro supporters are part of the same broad political camp, with a conservative agenda and strong opposition to the left.
Peña’s departure also removes a key Washington interlocutor in South America. During his government, Paraguay expanded cooperation with the United States on security, defense and intelligence. The country joined the Shield of the Americas, a Trump administration initiative to combat drug trafficking and criminal organizations. Paraguay also approved a bilateral agreement setting terms for the temporary presence of U.S. military personnel and civilian officials on Paraguayan territory. On foreign policy, Asunción aligned with Washington on strategic issues, including efforts to counter China’s influence in the region. Paraguay maintains official relations with Taiwan rather than recognizing Beijing, giving it a distinctive diplomatic position in South America.
Peña’s departure does not mean the right has lost power in Paraguay. Alliana, his expected successor, belongs to the same Partido Colorado and is not expected to make immediate changes to those policy directions. However, the political crisis and domestic pressure over decisions made by the previous government could affect whether existing agreements continue.
