Paraguay's President Santiago Peña Impeached and Placed Under House Arrest

Paraguay's President Santiago Peña was removed from office on Friday and immediately placed under house arrest in the South American country. The move follows this week's collapse of the digital bank Ueno Bank, which has set off a wide financial crisis and street protests. The bank has links to Peña's private business interests.

How the removal unfolded

Peña had offered to resign on Thursday, but senators declined to accept it. They impeached him instead and charged him with misconduct, which means he lost the immunity normally granted to former presidents. Forty-four of 45 senators voted in favour, including members of his own party; one lawmaker was absent. Senate president Basilio Núñez said afterwards that Peña had been found guilty of "dereliction of duty".

The charges allege conflicts of interest, manipulation of regulatory oversight, diversion of pension funds and participation in an institutional cover-up involving the central bank. Peña, who held shares in the company that owned the bank until last year, denies any wrongdoing.

Impact of the bank's failure

After Paraguay's central bank seized Ueno Bank, more than half of the country's population lost access to their savings. An estimated three million depositors still cannot reach their savings and pensions, and this has prompted widespread protests, particularly in the capital, Asunción.

Peña is due to be questioned on Saturday over allegations of breach of trust, influence peddling and misappropriation of funds, prosecutor Silvia Margarita Gonzalez Vester said.

New leadership

Vice-President Pedro Alliana was sworn in as interim President and will serve until 2028. He pledged that compatriots struggling because of the financial collapse "will be fully compensated".