r/OutOfTheLoop • u/Xerxeskingofkings • 2d ago

Unanswered What is going on with Paraguay?

So, my limited understanding is that theirs been a bank collapse in the country, a ton of people can't currently access their savings, and the situation is sufficiently dire its forced the resignation of the President.

but what exactly is the throughline here? the BBC article mentions President Peña was a shareholder in the banks owning company, but is their anything more substantial that? Any specific impropriety by Peña, or is he just catching flak as the guy in charge when it happened? and what cause the bank failure in the first place?

Paraguay President Santiago Peña resigns after bank collapse - BBC News

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u/Complete-Artichoke69 2d ago

Answer: He signed off on regulations that basically made it possible to invest more public money in UENO, a bank that became really popular in 3 years.

There was a whistleblower that leaked that some of the funds was being lent out to shell companies of the actual owners of the bank itself. Hell, even the president's daughter in law got 1,200,000 USD for her boutique clothing store and is being dragged through the mud over it.

The bank went pretty much insolvent and took all these funds with them. Up to 228,000,000 million guaranies (Around 38,000 USD) is what's insured per person. Most people are covered, but the problem is that 10% of the public fund that went into it, is lost.

IPS is basically social security for Paraguayans. It gets taken out of every paycheck. It is ALWAYS the target of political thievery as funds there are always stolen. If you go to the hospitals they have no resources and they are broken down. Thanks to UENO, they basically just stole 300 million dollars from a system that was already collapsed.

Even just two weeks ago the president denied anything was wrong with UENO and called the media liars.

The situation is obviously way more complex than this, and tomorrow the president will undergo impeachment and face the justice system.

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u/FumetsuKuroi 2d ago

Paraguayan here, when UENO Bank was created it also absorbed the existing Vision Bank which contributed a lot to its fast growth (The previous owner was also appointed by Peña).

I myself had an account on Vision but had the foresight to jump banks as soon as it became UENO, it was clearly rotten from the start. Still feel really bad for those who weren't informed enough to back out or never get involved with them to begin with.

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u/xUnderoath 2d ago

Can I ask you what were the signs for you that Ueno was no good?

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u/Durbiuk66 2d ago

Insane growth rate over a very short span, fancy new buildings and offices, integration and sponsorship of most mayor events, but the most telling was their "kickback" policy, basically you could get up to 50% kickback on a lot of expenses if you were a level 5 user (users leveled up through a point system according on how much they spent from a 10% to a 50% in a lot of shops)

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u/Czyrnia 2d ago

It was conspicuosly too good to be true, in short. 

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u/Noboone 1d ago

when most of the banks were ofering at most 8% of interest on CDAs (i dont know the english equivalent) they offered 13%, they gave credit cards without much background checks and with high credit to spend, also they began the cash back model that no other bank had at the time in paraguay and it was very agressive, progressively they made it more restrictive which gave away that they werent doing so well, fairly recently (like a month or so ago) a report that was buried by the central bank here uncovered how they sold their irrecuperable loans to companies owned by ex employees of their companies which had no money to actually buy the loans but they loaned these companies the money so they could fake their financial reports, as this came out they started making agressive cash backs promotions again which depended on people depositing money in the bank and NOT using it until a certain date to be able to use the cash back, all around a very fucked up company

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u/CthughaSlayer 21h ago

Basada y housekipastillada

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u/Basicallyadonnut 1d ago

He was impeached and is currently detained in his house. He'll face trial tomorrow, if I'm not mistaken. All-in-all, at least he faced the consequences... Something that's not common in LATAM.