Santiago Peña announces central bank changes and emergency law after Ueno Bank collapse in Paraguay

Paraguayan President Santiago Peña has moved to contain the fallout from the dissolution of Ueno Bank, announcing leadership changes at the Banco Central del Paraguay (BCP), an emergency law to return deposits, and criminal accountability for those behind the collapse. For PSPs and other high-risk payment operators, the immediate issue is simple: when a bank fails, the freeze does not stop at retail savers.

1. Peña said he sent Congress a request for constitutional approval to appoint Raúl Vera Bogado as the new BCP president, along with two new directors, Pedro Acosta and Edsel González. He said all three have banking experience and specific crisis-management experience.
2. The leadership shake-up follows a conflict-of-interest dispute around Carlos Carvallo, who had previously chaired Financiera Ueno, the predecessor to the bank, before taking over the central bank in 2023. Carvallo announced his resignation, but said he would remain temporarily to ensure the resolution process followed the “appropriate course.”
3. Peña also said he met with the presidents of both chambers of Congress to push an emergency law that would return funds to depositors “as soon as possible.” According to him, the measure would cover 98% of the bank’s depositors, with payments starting this week.
4. The BCP dissolved Ueno Bank after finding that its solvency ratio had fallen below 50% of the required minimum. The decision, announced early Tuesday, froze roughly USD 380 million in funds held by the Instituto de Previsión Social (IPS), including deposits from about 32,000 retirees, as well as funds from the Administración Nacional de Electricidad (ANDE) and the Itaipú binational dam.
5. Private savers were also caught in the freeze. Under the Fondo de Garantía de Depósitos (FGD), protection extends up to 75 monthly minimum wages per person, equal to 228.300.000 guaraníes (about USD 38.622); any deposits above that threshold will depend on the outcome of the balance sheet process.