Paraguay Moves to Repay Ueno Depositors as Crisis Tests New Government

Paraguay Moves to Repay Ueno Depositors as Crisis Tests New Government
Paraguay’s response to the Ueno Bank collapse is taking shape on two tracks: immediate relief for depositors and a broader effort to restore confidence in financial oversight. Both accounts agree that roughly 1.2 million customers have recovered $168 million since repayments began, but they place different weight on what must come next.

Authorities have expanded payments to customers with larger balances and to borrowers whose overdue installments can be deducted. Yet the guarantee fund reportedly covers no more than $36,000 per account, leaving questions over deposits above that threshold, including money held by public institutions. Prosecutors say they are working with counterparts in the United States, Luxembourg and Argentina to trace assets abroad and return them to compensate victims.

For teachers’ unions, the central concern is the pension money held at Ueno. María Fernandez, a 62-year-old teacher, said she hoped President Pedro Alliana would “remove all the criminals who stole our pension contributions.” Union leader Rafael Resquín said educators would give the new government a “vote of confidence,” but warned: “If that trust is broken, we will take to the streets.”

The administration’s allies frame Alliana’s nomination of economist Jorge Schreiner to lead the Central Bank as an institutional answer to the crisis. Schreiner’s appointment, which requires Senate approval, is intended to “strengthen the institutional structure” of the bank and restore public confidence, according to the account of the announcement.

That emphasis on technical credibility contrasts with the demands for political accountability, though both perspectives see the Ueno intervention as a national confidence crisis. The appointment comes after the removal of former president Santiago Peña and the resignation of former Central Bank chief Carlos Carvallo, while investigators continue pursuing alleged irregularities connected to the bank.

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