Teachers demand return of $60 million in pension funds after Ueno Bank collapse

The financial sector in Paraguay is under intense scrutiny following the rapid intervention of Ueno Bank, a move that froze over 3 million accounts and destabilized the national currency.

Public schoolteachers began a general strike on Monday, mobilizing in several cities to protect their financial future. Silvio Piris, president of the Federation of Paraguayan Educators, identified approximately $60 million in pension deposits held at Ueno as the primary driver for the walkout. Piris told Channel 9 that recovering these specific funds must be treated as the top priority for the state.

The intervention of Ueno Bank by the government last Tuesday locked account holders out of their money. The freeze extended beyond individual savings to include government-owned accounts and various pension funds. In response to the initial freeze, the Central Bank began processing refunds last week. By Saturday, officials reported that more than 1.2 million customers had received either partial or full refunds. Deposits in the country are insured up to a limit of roughly $37,000.

The bank's failure triggered a political crisis that resulted in the removal of President Santiago Peña. Legislators accused Peña of using his influence to steer hundreds of millions of dollars in public funds into Ueno while regulators ignored risky insider lending. Impeachment charges allege that Peña held a stake in Ueno's holding company and appointed a former Ueno executive to lead the central bank. Lawmakers further claim Peña allowed the state pension fund to deposit $355 million at the bank, exceeding legal limits. Peña has denied any wrongdoing.

Peña was charged on Saturday with breach of trust and administration for personal gain. Prosecutors stated he faces up to 20 years in prison if found guilty. He is currently held at a military base while an anti-corruption probe continues. The investigation also involves the former head of the central bank. Vice President Pedro Alliana has assumed the presidency.

The economic impact of the crisis is visible in the currency markets. The guarani has lost approximately 8% of its value against the U.S. dollar since the intervention. Protests from account holders have led to clashes with police, fueling broader doubts about the stability of the nation's financial system.