Pedro Alliana has assumed office as President of Paraguay following the impeachment of his predecessor, Santiago Peña, over a major banking crisis that left millions of customers unable to access their money.

Senate voted overwhelmingly on Friday to remove Peña from office, with 44 of the 45 senators voting in favour of his impeachment. One senator was absent.

Senate President Basilio Núñez declared Peña guilty of poor performance in the discharge of his duties, following allegations linking him to the collapse of Ueno Bank, a major financial institution in the country.

The bank's collapse triggered widespread protests as nearly three million customers, including pensioners, reportedly faced difficulties accessing their deposits.

Shortly after his removal, Paraguayan authorities placed Peña under house arrest. Prosecutors said he would be questioned over allegations including breach of trust, influence peddling and misappropriation of funds. Peña has denied wrongdoing.

The crisis was linked to allegations of conflict of interest, particularly because Peña reportedly held shares in Grupo Vázquez, the holding company that controlled Ueno Bank, until 2025.

Meanwhile, Alliana, who previously served as vice-president, was sworn in as the new president and will complete the country's 2023–2028 presidential term, which ends in August 2028.

In his inaugural address, Alliana pledged to ensure that depositors affected by the banking crisis receive compensation.

He also promised to prioritise vulnerable citizens and improve public services, particularly healthcare, while announcing plans to introduce measures aimed at reducing unnecessary government expenditure.

The banking crisis has also resulted in the resignation of senior government and financial officials, including the Central Bank governor and the Interior Minister, while eight former Ueno Bank executives have reportedly been arrested.

The development has attracted international attention, with concerns over its implications for Paraguay's financial stability and political institutions.