The digital bank Ueno promised Paraguayans a sleek financial future with splashy deals and cash-back offers, but it collapsed in a massive scandal. Millions of customers were locked out of their accounts as the bank failed amid charges of insider dealing and regulatory collusion. The crisis ensnared President Santiago Peña, who was impeached and arrested on charges of funneling nearly a billion dollars of public funds to the bank.
Prosecutors also indicted former central bank chief Carlos Carvallo for looking the other way. The bank reported $2.8 billion in deposits before collapsing, with analysts estimating a third may never be returned. The crisis has jeopardized $450 million in social security funds and threatens to bankrupt many local businesses.
While a state-backed deposit insurance fund covers about 97% of depositors up to $38,000, many low-income Paraguayans face severe financial hardship. The scandal has exposed the deep inequalities of a system where political power and private gain blurred, leaving millions hoodwinked while elites avoided the fallout.
Source: New York Times Top Stories · Summarized by HeadlinesBriefing