Paraguayan President Santiago Peña Ousted and Placed Under House Arrest Following Bank Collapse

Paraguayan authorities placed ousted president Santiago Peña under house arrest on Friday, shortly after the Senate unanimously removed him from office. The political crisis unfolded following the collapse of Ueno Bank, an institution with links to Peña's private business interests, which locked nearly half of the country's population out of their savings and pension accounts.

Peña had offered to step down on Thursday, but lawmakers rejected the resignation and proceeded with impeachment proceedings. All 44 senators present voted to remove him for misconduct in office, stripping him of the immunity typically granted to former presidents. Prosecutors stated that Peña is facing allegations including breach of trust, influence peddling, misappropriation of funds, and using public office for personal gain.

The financial turmoil began when Paraguay's central bank seized Ueno Bank, sending shock waves through the national financial system and leaving an estimated three million depositors unable to access their money. Long lines formed outside bank branches in the capital of Asunción earlier in the week as customers attempted to withdraw funds, leading to widespread public outrage and demonstrations across the country.

Protests erupted in response to the freeze, with thousands taking to the streets to demand their money back. Earlier demonstrations involved clashes with police who deployed tear gas and water cannons against the crowds. As the Senate delivered its verdict, crowds gathered outside Congress in Asunción to celebrate the decision, waving flags and chanting.

Following the Senate's decision, Vice President Pedro Alliana was sworn in as the new interim president to serve out the term until August 2028. Alliana promised that affected citizens would be fully compensated for the financial collapse. Meanwhile, police ringed Peña's home on Friday night as protesters gathered outside, and prosecutors scheduled him to be questioned on Saturday regarding the ongoing investigation.