A sudden blank screen startled almost three million customers of Ueno Bank 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 state funds worth millions and has grown at breakneck speed in its three years of existence, stopped displaying users' accounts and showed a single message: "We cannot display the balance". At the same time, the Banco Central del Paraguay published a tough statement on its social media accounts: the bank was placed under intervention and its winding-up process began.
The reason for this "resolution procedure" against Ueno Bank was a wider financial warning, after a critical collapse in its solvency ratio had been detected, with the figure falling below 50%. The impact was immediate and triggered a political earthquake without precedent for the government of Santiago Peña. Since Tuesday, crowds of angry users have gathered around the main headquarters in Asunción and the bank's 75 branches across the country, hoping to save their money.
Outside the premises, which are closed and guarded by security staff, the scene has turned into one of extreme tension and utter despair. The anguish at the doors of the branches translates into daily emergencies that are impossible to handle. Some people, in tears, begged to withdraw their funds to pay for medicines for a gravely ill child; a few kilometres away, a construction worker was equally desperate when he saw that, without access to his savings, he would not even have money to buy food for his children that day.
The bank held around 850 million dollars (about 758 million euros) in public resources, including the funds of the Instituto de Previsión Social which support pensions and healthcare coverage for workers. The spectre of a corralito in the Argentine style immediately set alarm bells ringing among the population. "Who will answer for a lifetime of savings?
Will there be impunity?" read the banners held by protesters standing firm outside the branches. The whole country held its breath as it waited for the press conference of the Banco Central del Paraguay (BCP). The official confirmation was categorical: "We have closed the institution; neither the app, nor the cards, nor any service is active as of today", stated 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 guaranis or 37,700 dollars, around 33,620 euros) were in vain; suspicion and distrust had already completely taken over the streets. The political opposition accuses the BCP leadership of being complicit by omission in the fraud, but the fatal blow is aimed directly at the head of state. Santiago Peña has found himself in 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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