In the early hours of Tuesday, 3 November, the Central Bank of Paraguay (BCP) initiated a "resolution procedure" against Ueno Bank after its solvency ratio collapsed to 5.56 percent, less than half the regulatory minimum of 12 percent. The bank's app, cards and transfers went dark overnight, locking out 2.9 million customers in a country of 6.1 million people.
Within days, eight senior executives had been arrested, the president of the Central Bank had resigned, and the president of the republic, Santiago Peña, had announced his own departure in a crisis that is still claiming heads, after three consecutive nights of mass protests outside Congress.
Congress rejected Peña's resignation on Thursday, since accepting it would have made him a senator for life with immunity from prosecution, and the Chamber of Deputies voted 78-0 to impeach him. On Friday, the Senate rejected his request for a 72-hour extension to prepare his defense and ordered him to appear within half an hour. The same day, his chief of staff, Javier Giménez, his legal adviser, Roberto Moreno, and his interior minister, Enrique Riera, resigned.
Peña's is the first government of Trump's Shield of the Americas to fall. It comes two weeks after the defeat of Trump's candidate, Flávio Bolsonaro, in Brazil and three days after the massive repudiation of the Republicans in the US midterm elections. It exposes the brittleness of the regimes making up the far-right alliance established by Washington to police the hemisphere, most of them deeply unpopular and facing recession and protests.
The authorities and the financial press have worked in unison to insist that Ueno was an aberration. "Authorities say the crisis is limited to Ueno and does not reflect broader weaknesses in Paraguay's banking system," Reuters reported.
In fact, the collapse of a major bank, underwritten on Wall Street by JPMorgan and Bank of America, is a warning of the fragility of the so-called emerging markets. They are being squeezed by record debt, US interest rates near two-decade highs and inflation driven by war and tariffs.
The rush to open accounts elsewhere crashed other banks' apps, as the Paraguayan guaraní lost 8.8 percent against the US dollar throughout the week and country risk rose 23 percent.
The scale of the disaster is difficult to overstate. Ueno held approximately $850 million in public funds, including some $380 million belonging to the Social Security Institu
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