A sudden blank white screen surprised the almost three million Ueno Bank customers in the early hours of Tuesday 3 November. At around 03:24, the app of the Paraguayan institution, a key player in the system that manages multimillion-dollar state funds and has grown at a breakneck pace in its three years of existence, stopped displaying users' accounts and showed a single message instead: "We cannot display the balance". At the same time, the Central Bank of Paraguay issued a hard-hitting statement on its social media accounts: the institution was placed under intervention and its liquidation process was opened.
This "resolution procedure" against Ueno Bank responded to a major financial alert after a critical collapse in its solvency ratio was detected, which had fallen below 50%. The impact was immediate and triggered an unprecedented political earthquake for the government of Santiago Peña. Since Tuesday, crowds of outraged users have gathered outside the headquarters in Asunción and the 75 branches across the country, determined to save their money.
The scene outside the branches, which were closed and guarded, has turned into one of extreme tension and despair. The anguish at the doors translated into everyday emergencies that quickly became untenable. Some people, in tears, begged to withdraw their funds to pay for medicines for a seriously ill child; a few kilometres away, a construction worker was just as desperate when he realised that without access to his savings he would not even be able to buy food for his children that day.
The institution held around 850 million dollars (about 758 million euros) in public funds, including the funds of the Social Security Institute that underpin workers' pensions and healthcare coverage. The spectre of a corralito in the Argentine style immediately set alarm bells ringing among the population. "Who will answer for a lifetime's savings?
Will there be impunity?" read the placards of protesters holding their ground outside the offices. The whole country held its breath ahead of the press conference by the Central Bank of Paraguay (BCP). The official confirmation was categorical: "We proceeded to close the institution; neither the app, nor the cards, nor any service is active as of today", said board member Liana Caballero.
The authorities' attempts to calm tempers by reminding people that the law provides for a guarantee fund to reimburse each client up to 75 minimum wages (about 228 million guaraníes or 37,700 dollars, roughly 33,620 euros) were in vain; suspicion and mistrust had already taken full hold of the streets. The political opposition accuses the BCP leadership of being complicit by omission in the fraud, but the coup de grâce is aimed directly at the head of state. Santiago Peña has been thrust into the eye of the storm: at the request of 35 legislators, the Chamber of Deputies will meet tomorrow in an extraordinary session to vote on whether to open impeachment proceedings against him.
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