The Paraguayan bank story

Despite its weaknesses, Paraguay’s young democracy was still able to deliver under stress. Its free, boisterous press was the first to sound the alarm about Peña’s shenanigans. The Central Bank’s supervision chief did his job: he examined ueno’s numbers and recommended blocking the sale of its bad loans to a related company (Peña had appointed him to a different agency four days earlier). Legislators, including most of Peña’s fellow Colorados, moved swiftly to investigate and impeach the president. Prosecutors, who belong to a Public Ministry not always independent of the executive, ordered the arrest of ueno’s top directors the day the Central Bank took over the bank. They ordered Peña’s arrest the minute Congress impeached him—all within less than a week.

One of Paraguayan democracy’s greatest accomplishments has been earning an investment-grade rating for its sovereign debt, from Moody’s in 2024 and S&P in 2025.…