What happened in Paraguay With the Ueno Bank and, Can It Happen in Panama?
In early November 2026, Ueno Bank collapsed and was seized by the Central Bank of Paraguay (BCP) after regulators discovered severe insolvency and irregular insider lending. The failure froze the accounts of nearly 3 million customers, roughly 60% of Paraguay’s adult population and triggered a massive political scandal that led to the impeachment and arrest of President Santiago Peña. On November 2, 2026, the BCP placed Ueno Bank into a resolution procedure after accounting audits revealed its capital cushion had fallen to less than half the legal minimum. Poorly documented loans that totaled approximately $146 million dollars, were under collateralized and issued to companies tied to Grupo Vázquez, the bank’s parent conglomerate. In these cases the legal lending limits were exceeded. In addition, investigators found that the balance sheets were artificially inflated by recording operating expenses as assets. Following the collapse and political turmoil, Fitch Ratings withdrew its positive outlook on Paraguay’s sovereign credit rating.
Prosecutors have issued arrest warrants and charges for dozens of executives and officials. Those detained or charged include Grupo Vázquez owner Miguel Vázquez, former Central Bank President Carlos Carvallo (who previously chaired Ueno’s predecessor firm), Superintendent of Banks Holger Insfrán, and three former BCP board directors accused of ignoring warnings about the bank’s solvency dating back to 2025.
Could this same scenario happen in Panama?
Carlos Berguido, executive president of the Panama Banking Association (ABP), assured that the Panamanian banking system maintains a solid position, with assets exceeding $150 billion, deposits exceeding $105 billion, and capital and liquidity levels above legal requirements. “What happened at Ueno Banco is unthinkable to happen in Panama, as it was the result of the collapse of the bank’s corporate governance, along with compromised supervision.” Berguido highlighted the independence and thoroughness of the Superintendency of Banks of Panama as fundamental elements to prevent situations that compromise financial stability and the resources of depositors.
Berguido maintained that the Panamanian banking system is not only solvent and liquid in excess of legal requirements, but is also managed with integrity. He stated that the levels of provisions, capital and liquidity are above local and international regulations. The system’s capital adequacy ratio averages 16%, which is double the amount required by law, and the legal liquidity which averages 56%, is almost double the legal requirement and four times the requirement of most banking systems,” he emphasized.
Panama uses the United States dollar and operates without a central bank or government-backed deposit insurance, its banking system relies on strict self-insurance and active regulatory oversight.
