In four days, a bank failure brought down a president. On Tuesday, November 3, the Central Bank of Paraguay (BCP) started the resolution procedure for Ueno Bank because its solvency ratio fell below 50% of the legal minimum, according to the official statements compiled by ABC Color. Ueno billed itself as the bank with the most customers in the country: about 2.9 million, according to Finanzas Digital, and it held 9% of deposits and 8% of loans in the system, according to Moody's as cited by ABC Color.
On Friday, November 6, Paraguay's Senate removed President Santiago Peña from office for poor performance of his duties, by 44 votes, and Vice President Pedro Alliana took over the presidency, according to ABC Color's timeline. The charges included the deposits of the Social Security Institute (IPS) at Ueno and Peña's alleged ties to the bank's controlling group, which his defense denied.
View the data as a table
| Customers | 2.9 million |
| System deposits | 9% |
| Depositors covered | 97% |
| Deposit value covered | 30% |
What happened to Ueno Bank
After adjustments to its financial statements, the regulator's inspections found that the bank's capital no longer reached half the required minimum. The BCP board unanimously approved the resolution, and the Banking Superintendency appointed administrators to run the entity. The Securities Superintendency suspended redemptions from some mutual funds linked to the bank, which began to resume gradually from Thursday the 5th, according to ABC Color.
One figure explains the political dimension of the case. According to the indictment presented in the Senate, deposits by the IPS, the pension fund of Paraguayan workers, at Ueno rose from PYG 70 billion in September 2023 to PYG 2.15 trillion in April 2026, above legal limits, according to ABC Color. About 32,000 retirees received their payments there, according to ABC Color.
What happens to Ueno Bank deposits
Paraguay's Deposit Guarantee Fund (FGD) covers up to 75 minimum monthly wages per person or company, currently PYG 228,300,000. Balances above that amount will be paid "to the greatest extent possible" from the bank's remaining assets. Repayments started on Thursday night with a first group: depositors with balances of up to PYG 10 million (about US$1,565 at the official exchange rate, according to Finanzas Digital), no debts to Ueno and an account at another bank. Those who owe the bank money have that debt deducted before being paid. Payments can be checked on the FGD site.
The BCP estimates that 97% of depositors will be fully covered. In value, it is a different story: only about 30% of the amount of deposits was under the cap, according to Moody's, and excluding the IPS and other public entities, uninsured balances are about 40% of Ueno's deposits. The FGD had about US$1.6 billion in liquidity, roughly twice the bank's insured deposits, according to ABC Color.
- Tue Nov 3BCP starts Ueno's resolutionSolvency below 50% of minimum; administrators appointed
- Wed Nov 4Fund redemptions suspendedPeña announces his resignation; it is not processed for lack of quorum
- Thu Nov 5First FGD paymentsBalances of up to PYG 10 million
- Fri Nov 6Senate removes Peña44 votes; Pedro Alliana takes office
Is there a risk of contagion to Chile?
For now, analysts do not see systemic contagion. Moody's believes the impact can remain contained if the resolution is fast and orderly, because Ueno's liabilities to other local creditors are small, and Paraguayan banks had regulatory capital of 17.1% of risk-weighted assets. Banks such as Itaú, Continental, Sudameris and GNB, which together hold about 60% of deposits, could capture part of the funds leaving Ueno, according to ABC Color.
For Chile, the exposure is indirect. Chilean direct investment in Paraguay totaled US$787 million at the end of 2025, according to BCP data cited by Diario Financiero, with companies such as Coca-Cola Andina, CCU, Enex, Carozzi, Agunsa and Latam. Businessman Laurence Golborne, who invests in Paraguay, told DF his businesses have no direct exposure to Ueno and that "the banks are quite solid and there has been no adverse reaction so far." How the soundness of Chilean banks looks is in our ranking of Chile's largest banks.
Does your bank or fintech want to reach people comparing where to keep their money? Advertise on Pauta Financiera.
See advertising optionsWhat Chile's state deposit guarantee covers
Chile has no fund like Paraguay's, but rather a state guarantee defined in the General Banking Law. According to the CMF, for individuals it covers 100% of a bank's obligations to a person (time deposits, savings accounts and documents), including inflation adjustments and interest, up to UF 200 per calendar year at each bank and UF 400 across the system. At the UF value of November 7, 2026, that is CLP 8,256,966 and CLP 16,513,932.
Demand deposits (checking accounts, debit accounts such as CuentaRUT and savings accounts with unconditional withdrawals) are treated differently: if a bank is liquidated, they are paid in full, whether they belong to individuals or companies, under article 132 of the law. Companies have no state guarantee on their time deposits. If you are deciding where to keep your savings, compare what each option yields and keep the per-bank cap in mind when splitting large amounts.
| Topic | Paraguay (FGD) | Chile (state guarantee) |
|---|---|---|
| Who pays | Deposit Guarantee Fund | The State |
| Cap per person | 75 minimum wages (PYG 228.3 million) per institution | UF 200 per bank and UF 400 across the system, per year |
| Demand deposits | Within the same cap | 100% if the bank is liquidated |
| Companies | Covered up to the cap | No guarantee on time deposits |
Source: BCP via ABC Color and CMF, consulted on November 7, 2026. Peso amounts: Pauta Financiera calculation with that day's UF (CLP 41,285).
Frequently asked questions about the Ueno Bank crisis
What is Ueno Bank?
A Paraguayan bank with about 2.9 million customers that held 9% of system deposits. The Central Bank of Paraguay began its resolution on November 3, 2026.
How much are Ueno depositors getting back?
The FGD covers up to PYG 228.3 million per person. The first payments, from November 5, were for balances of up to PYG 10 million.
Why was Santiago Peña removed?
The Senate removed him on November 6 for poor performance of his duties, on charges that included IPS deposits at Ueno and his alleged ties to the bank. Pedro Alliana took office.
Are my deposits in Chile guaranteed?
If you are an individual, the State guarantees your time and savings deposits up to UF 200 per bank a year (about CLP 8,256,966) and UF 400 across the system. Checking and debit accounts are paid in full if the bank is liquidated.
