Ueno bank scheme shakes Paraguay and brings down government leadership
state intervention in paraguay freezes balances, forces the ouster of an agent and reveals an accounting hole at ueno bank, as reported by the antagonist.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM O ANTAGONISTA · 2 MIN
The Paraguayan financial market faced drastic turbulence after the monetary authority ordered intervention in the institution on March 3, according to O Antagonista. The bank reached almost 3 million accounts in a nation with a total population of 6.4 million people, having reached the mark of 470,000 plastic items released in 24 hours, which caused its solvency to plummet to 5.56%, a level well below the minimum level of 12% stipulated by current regulations.
The company's collapse generated chain political effects highlighted by O Antagonista. Head of State Santiago Peña left command of the country on March 5, having maintained a stake in the business until the first months of 2025. On the same date, the top director of the monetary authority, Carlos Carvallo Spalding, left his post after having previously headed Financeira Ueno.
According to O Antagonista, the court ordered the precautionary detention of Miguel Vázquez, main director and creator of Ueno Bank, on charges of four crimes against the financial system. Vázquez had great aspirations when he publicly stated that his biggest goal was to transform Paraguay into the birthplace of his first corporate unicorn under his own leadership, as the portal found out.
The investigation revealed that the company obtained approval to operate only in November 2023, but raised funds in the order of 850 million dollars in state money, including funds from the Social Security Institute. The Antagonist highlighted the occurrence of an atypical transaction linked to a credit portfolio valued at 74.4 million dollars associated with the firm Vinanzas, while the federal measure suspended the withdrawal of amounts by users for a period of up to 15 days.
What changes for the investor
The institutional scandal and the breakdown of confidence in the governance of a regional neighbor increase the risk premium for Latin American assets. Investors who monitor regulatory stability and legal security in the region are beginning to reevaluate exposure to smaller economies, where close ties between public authorities and the private sector can mask serious systemic weaknesses and exchange rate volatility.
Automatically translated from Portuguese.
