Paraguay’s Senate removes President Peña, who is put under house arrest; Alliana sworn in

Pedro Alliana was sworn in as Paraguay’s president on Friday, hours after the Senate removed Santiago Peña from office over the collapse of Ueno Bank, Al Jazeera reported. Prosecutors then ordered Peña placed under house arrest.

Alliana, 52, becomes the country’s 53rd president. He had been vice president since Peña’s term began in 2023. According to Al Jazeera, 44 senators in the 45-member chamber voted to remove Peña, and one abstained. “I take my leave with gratitude, while fully acknowledging the anguish of those who are currently awaiting answers,” Peña wrote on social media.

Arrest and warrants

Prosecutors suspect Peña of breach of trust and other crimes, and ordered him confined to his home. A warrant was also issued for Carlos Carvallo, who headed the central bank until he resigned earlier this week. The bank has been accused of failing to supervise Ueno properly.

How the bank failed

The crisis broke on Tuesday, when the central bank announced that Ueno no longer met legal solvency requirements, meaning its collateral was too thin to cover its loans and other activities. The authorities took control of the lender and moved its remaining assets to other banks. Even so, millions of customers suddenly could not reach their accounts or pension payments, Al Jazeera said.

Ueno had about three million members, covering nearly two-thirds of Paraguay’s adults. It emerged under the Ueno brand in 2023 and grew into the country’s fifth-largest bank by deposits, helped by $800m in public money. The bank had said more than a million Paraguayans opened their first account with it.

Questions now centre on whether regulators supervised the bank adequately and whether Peña had conflicts of interest. He was named in 2023 as a shareholder in Ueno’s parent company, but says he sold his stake in early 2025. Prosecutors have asked whether political connections shielded the bank from scrutiny; some $355m in state pension funds was invested in it. At least 27 people face criminal charges, among them lead shareholder Miguel Vazquez. Investigators are looking at attempted fraud, breach of trust, misappropriation of funds and influence peddling.

Congress turns on its president

Peña had offered to step down, citing the need to protect democratic institutions. Congress refused on Thursday and pressed on with impeachment. The Chamber of Deputies voted 78 to zero to impeach him, clearing the way for the Senate trial a day later. Peña’s own Colorado Party, which has dominated Paraguayan politics since 1948, backed the move. “We support the impeachment of the president of the republic, Santiago Pena, in order to restore the republic’s institutions,” former president and party leader Horacio Cartes said in a statement.

Deputies did not open impeachment proceedings against Alliana. He began his career as governor of Neembucu department in the south and then spent nearly a decade in the Chamber of Deputies, three years of it as president of the chamber.

What happens next

Al Jazeera said Peña has indicated he will cooperate with investigators. He did not attend the Senate session, sending lawyers instead, and wrote that he did not want his presence to deepen division or instability. Earlier on Friday he had complained that the pace of the Senate process was too fast, asking for more time to mount a defence. Alliana takes over as the country faces one of its most serious political and economic scandals in recent years, and the outcome of the criminal cases remains open.