Bank Collapse and Minister Fight Expose State Power

Ueno Bank shut off its app, cards and every other service after Paraguay’s central bank began a resolution process on Tuesday, November 3, finding the bank’s solvency ratio below 50% of the required minimum. The decision landed on 2.9 million customers in a country of 6.1 million people, while public funds and pensioners’ accounts were also exposed.

When the Bank Stops, Customers Wait

“Neither the app, nor the cards, nor any service of the entity is active as of today,” said Liana Caballero, a member of the BCP board who became interim head. She said the law allowed a maximum of 15 days to return customers’ funds. Officials said the first payment, of up to 10 million guaraníes to depositors, would be made “as soon as possible.” That promise sits beside a guarantee capped at 75 minimum wages, or about 228,300,000 guaraníes, per affected natural or legal person.

The exposure reaches beyond individual accounts. Concern focused on accounts belonging to about 32,000 pensioners and US$355 million invested in Ueno Bank by the state-run Social Security Institute. The National Electricity Administration held about US$46 million from Inter-American Development Bank and Taiwan loans, along with 36 billion guaraníes of its own funds, equivalent to US$6 million, its president, Miguel Báez, told ABC Color.

The state water utility Empresa de Servicios Sanitarios told customers who used automatic debit or Ueno payments they “will not be subject to disconnection for nonpayment.” The Paraguayan Association of Importers and Merchants warned of a “semi-paralysis” in the commercial market, saying “two out of every three electronic transactions are made through Ueno accounts.” Caballero said allowing customers to keep using credit cards would create obligations against “someone who no longer exists, because the bank no longer exists.”

The central bank’s process provides for inspectors from the Superintendency of Banks and activation of the Deposit Guarantee Fund. Ueno began operating as a bank in November 2023. Experts and lawmakers had requested information about it for months before the resolution process began.

Officials Face Pressure; Depositors Face Limits

Carlos Carvallo, who led the Central Bank of Paraguay and previously headed Financiera Ueno, made his position available to the Senate hours after the central bank’s decision. President Santiago Peña requested Carvallo’s resignation on X and called the matter “a particular case.” In an extraordinary session, the Senate approved a bill setting a limit of up to 40 minimum wages each depositor could receive within 24 hours before the bank’s closure.

Opposition senators threatened to pursue impeachment against Peña and Vice President Pedro Alliana, accusing them of the “looting” of the country and pension funds. They said the case could not go unpunished. Miguel Vásquez, Ueno Bank’s CEO and one of its founders, surrendered to Paraguayan authorities after police surrounded his home. He was charged with breach of trust along with other senior bank officials.

Chile’s Removal Fight Runs Through Congress

In Chile, President José Antonio Kast said on Tuesday, November 3, that Justice Minister Fernando Rabat retained his confidence. Kast challenged opposition lawmakers to file their constitutional accusation and put it to a vote, saying “cuenta con mi confianza.” He said the president appoints and removes ministers, not lawmakers, and said he had taken political responsibility. With Kast refusing to seek Rabat’s resignation, the accusation process is the route to remove the minister against the president’s wishes.

Centre-left and left opposition parties announced on Wednesday, October 28, that they would file the accusation. They count 56 sentence-reduction decrees, most involving people convicted of sexual crimes against minors, and say more may exist. A commission rates inmates’ conduct, and the Justice Ministry signs decrees formalizing sentence cuts for good conduct. Opposition lawmakers say the decrees were unlawful; no court has ruled on that question.

As of November 3, the opposition had not filed the accusation, and it was not confirmed whether it had filed since Kast spoke. No filing date or signature count had been announced, and the number of governing-bloc deputies who might support it was unknown. The process begins in the Chamber of Deputies, which votes first; the Senate then acts as a jury and decides whether to remove the official. The opposition could continue even if Rabat resigned.

Kast criticized opposition lawmakers who threatened to reject an item in the national budget as protest, asking who would be harmed and saying it would be the victims the opposition claimed to defend. The budget item was not identified. Government spokesman Gonzalo Arenas had said on Thursday, October 29, that keeping Rabat was not a decision set in stone. The president’s confidence remained, while the legislative route carried the burden of changing it.