Major Digital Bank In Paraguay Collapses With Half of Population's Savings (apnews.com) 77
Paraguayan President Santiago Pena resigned Thursday amid mass protests and impeachment threats following the collapse of Ueno Bank, a major digital lender with close ties to his administration and more than 60% of the country's adults as customers. Regulators seized the bank after uncovering risky insider lending and accounting irregularities that left its capital below legal requirements, locking millions of customers out of their savings. The Associated Press reports: Soon after winning its banking license in 2023, Ueno seemed to be everywhere in Paraguay. The digital lender, a rebranded version of a decades-old finance company, lured customers with generous cash-back offers on groceries, grew to more than 70 locations, sponsored Paraguay's national soccer team and plastered its name on the country's main stadium. Government money poured into Ueno's coffers under Pena. He also appointed Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank, the agency charged with supervising the digital lender. As of last month, Ueno reported holding roughly $800 million in public deposits, about a quarter of its total, including money from the state pension and health fund and the operators of Paraguay's giant hydroelectric dams.
Even as retirees' savings and other public money piled up at Ueno, worries were escalating inside the central bank. In June, its inspectors found a pattern of risky lending to insiders, reported ABC Color, a leading Paraguayan newspaper. Ueno had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral to cover the debts if they went bad. On a single day in September 2025, nearly $39 million had gone to three such companies. Pena repeatedly brushed off the warnings. As recently as last month, he defended Ueno and the central bank's oversight, dismissing the concerns as a smear campaign that was spooking the public.
But on Monday, it all came crashing down. Regulators investigating Ueno's loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets. Once the books were corrected, Ueno's capital, the cushion banks must keep to absorb losses, fell to less than half the legal minimum. The central bank seized the lender Tuesday and announced plans to move customers' accounts, along with whatever assets still hold value, to other banks before liquidating what's left. Ueno's app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside with no way to cash out their savings. On Wednesday, a rush to open new accounts elsewhere crashed other banks' mobile apps, fueling public panic. Officials say they had begun repaying depositors and opening accounts at other banks for the roughly 280,000 customers who had banked exclusively with Ueno.
"The banking system is sound," insisted Pedro Acosta Bernal, appointed interim central bank president Wednesday after Carvallo resigned at Pena's request.
Meanwhile, eight senior Ueno executives have been detained, including founder Miguel Vazquez and bank President Juan Manuel Gustale. "Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud," reports the AP.
Even as retirees' savings and other public money piled up at Ueno, worries were escalating inside the central bank. In June, its inspectors found a pattern of risky lending to insiders, reported ABC Color, a leading Paraguayan newspaper. Ueno had extended large sums to companies tied to its owners, beyond what the law allows and without enough collateral to cover the debts if they went bad. On a single day in September 2025, nearly $39 million had gone to three such companies. Pena repeatedly brushed off the warnings. As recently as last month, he defended Ueno and the central bank's oversight, dismissing the concerns as a smear campaign that was spooking the public.
But on Monday, it all came crashing down. Regulators investigating Ueno's loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets. Once the books were corrected, Ueno's capital, the cushion banks must keep to absorb losses, fell to less than half the legal minimum. The central bank seized the lender Tuesday and announced plans to move customers' accounts, along with whatever assets still hold value, to other banks before liquidating what's left. Ueno's app, cards and transfers went dark and its branches locked their doors, leaving desperate depositors lined up outside with no way to cash out their savings. On Wednesday, a rush to open new accounts elsewhere crashed other banks' mobile apps, fueling public panic. Officials say they had begun repaying depositors and opening accounts at other banks for the roughly 280,000 customers who had banked exclusively with Ueno.
"The banking system is sound," insisted Pedro Acosta Bernal, appointed interim central bank president Wednesday after Carvallo resigned at Pena's request.
Meanwhile, eight senior Ueno executives have been detained, including founder Miguel Vazquez and bank President Juan Manuel Gustale. "Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud," reports the AP.
DEC logo (Score:4, Funny)
What's with the DEC logo? (Score:5, Insightful)
This is a story about a fallen digital bank, not the already fallen Digital Equipment Corporation. So why the latter's logo in the header?
Re:What's with the DEC logo? (Score:5, Funny)
Re:What's with the DEC logo? (Score:5, Interesting)
+1 Funny, but you got me wondering, and I checked. There are in fact some PDP-11 installations still around, in nuclear and chemical plants where the cost of recertification is too high to consider newer hardware.
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Pretty sure I have a DEC stock certificate around here. What's it worth as a collector's item?
But from a more historical perspective I regard the DEC saga as another example of how good guys finish last in America. Which makes me think of Sun and the old H-P and Palm and... (I even asked an AI for more examples, but it failed to understand the question and couldn't even guess what kind of answer I wanted to hear. But still long and verbose.)
But it still makes me laugh when the bad guys "over-invest" in poli
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My boss used to say, "DEC? Best hardware in the business, worst salescritters in the world."
Re:What's with the DEC logo? (Score:4, Interesting)
There's a lot of that stuff around, if a company buys a million dollar automated CNC machine they're not going to toss it just because the OS is no longer supported.
I was surplussing a bunch of old computers and equipment from a local electric utility and saw a knee-high pile of ancient Compaq laptops collecting dust. I offered to take them away, and the guys almost had heart attacks. They had bought a cutting edge radio tower for their fleet, then the manufacturer was purchased, the new owner discontinued the product, and they were left with control software that absolutely could NOT be upgraded above DOS3 on a 386. (No, compatibility mode and VMs did not work.)
Older CAT scans and MRI machines required drivers that directly accessed the hardware (a no-no since WinXP), they'll never be upgraded until they die. Factory floors around the world have ancient creaking desktop machines running DOS that control critical hardware, power dams and megawatt generators often require versions of UNIX 20+ years out of date, ten years ago there was a sawmill in Oregon that still ran on PUNCH CARDS. There is a Bio-Hazard Level 4 lab in the Puget Sound area which relies on a Radionix input/output board from the early 1990s (that one worries me).
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There's a lot of that stuff around, if a company buys a million dollar automated CNC machine they're not going to toss it just because the OS is no longer supported.
There's a lot of that stuff around, if a company buys a 500 million dollar oil platform they're not going to toss it just because Windows NT is no longer supported.
That's a real thing BTW.
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NT 4.0 would be a good choice as long as it's air-gapped. Before the update-mania really took hold one of my NT 4.0 servers had longer uninterrupted uptime than any of our Unix, AIX, OS2 or Novell servers. The ex-DEC crew that wrote it, headed by Dave Cutler, did a fine job with it.
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Back in the day, Intel used to have control systems in fabs running on VAX equipment, because the cost of replacement was far more than the gain until the fab was idled for maintenance.
Don't fix what isn't broken.
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It is because the editors of Slashdot don't know the history of computing (or Slashdot itself).
The DEC logo sais DIGITAL, and they took it to mean anything digital.
Despite the headline saying it is a "digital bank", the summary says customers are lined up at its locations, so it is not only digital.
But anyways ....
This downward spiral has been going on for years [baheyeldin.com], as I wrote back in 2020.
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This bank is about as digital as a five-finger discount...
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Courtesy of our new AI editor overlords. My theory is that slashdot is now a completely bot-run system, hosted on forgotten hardware in a data center no one quite knows where it is anymore.
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I hate to say this, but I don't think an AI would make that mistake. I have at least that much faith in them.
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Does it really require AI to copy articles from other sites?
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It's not required, but it's probably more efficient and better results.
That's how we know it's not AI - we wouldn't see the level of fuckups from an AI.
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DEC was out of business before the editors were born. Yes I know Compaq bough them but it was sad to see a company with a history like DEC be absorbed be a pc clone manufacturer.
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Here come the 6 or less digit UID greybeards....
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You are technically correct—the best kind of correct.
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Get off my lawn.
Re: What's with the DEC logo? (Score:2)
I was there Frodo⦠I was there when the great companies fell, and stories related to Microsoft had the Bill Gates Borg iconâ¦
Oh, and for the âoeOMG Ponies!â Rebrand.
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Checking in!
Though, honestly, the only interactions with DEC products I know I've had are with various forms of DECTalk. (John Madden!)
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This is a story about a fallen digital bank, not the already fallen Digital Equipment Corporation. So why the latter's logo in the header?
I suspect the folks running the place are both young-even-for-millennials and not too tech savvy. It's also possible that they see "digital" as a reference to literal fingers, such as the ones in Uruguay's metaphorical pie...
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Because some ignorant twat editor put it there, not understanding that a company used to exist called Digital Equipment Corp. with that logo.
Re: What's with the DEC logo? (Score:2)
I think it started by accident, but now it's just for fun.
this is what happens when power is concentraded (Score:2)
Beware of monopolies or near-monopolies! (Warning directed at MS and Amazon groupies).
Re: this is what happens when power is concentrade (Score:2)
Re: this is what happens when power is concentrad (Score:2)
Considering it mentioned MS I assume this is a warning for enterprise infrastructure and not retail.
I think (hope?) Amazon has had enough outages that people are semi diversified away from it. But who knows.
The half day Amazon goes down/slows up every year or so I think keeps people on their toes from fully relying on it.
DEC Logo (Score:2)
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It's a digital bank and somewhere deep in Slashdot's bowels, the two are linked.
Re: DEC Logo (Score:2)
That is where they keep their brains after all
Stupid Greed (Score:3)
Running a bank is already a license to print money.
But no, making money by arbitraging the difference between deposits and loans wasn't good enough, they had to go ahead and give "free" money to themselves via dodgy loans.
The consequence? Death penalty for the bank, since it was no longer financially sound.
Definitely falls under the column of killing the golden goose.
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The topic is about a bank in Paraguay.
"He also appointed Carlos Carvallo, president of Financiera Ueno, the predecessor to Ueno Bank, to run the central bank, the agency charged with supervising the digital lender."
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I will agree... it's all about greed. It's what makes the world go 'round.
If you took away the possibility of the higher-ups in the banks of them making crap-tons off our (y'know, the people) money, the banks would just collapse worldwide.
Postcards from Paraguay (Score:2)
This all looks like a flashback to the bank panics of the 19th century in the United States. Fun times. An important lesson in how actual sound regulation can go a long way for financial stability, without so much as to choke off the economy.
Re:BANK LEFT WING. National Socialism = BANKRUPT (Score:5, Informative)
Let's check who the ruling party in Paraguay is:
The ruling party in Paraguay is the Colorado Party (Asociación Nacional Republicana – Partido Colorado, ANR-PC), a conservative and right-wing political party led by party president Horacio Cartes. [wikipedia.org]
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Look at eadon-com's sig as well as his post. He's not exactly tethered to the facts.
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Let's check who the ruling party in Paraguay is:
The ruling party in Paraguay is the Colorado Party (Asociación Nacional Republicana – Partido Colorado, ANR-PC), a conservative and right-wing political party led by party president Horacio Cartes. [wikipedia.org]
A couple of things of interest.
1) "Colorado" in this case means "Red". It does indeed also mean "colored" and even "dyed" but the term mostly means "red" to Spanish speakers. Kind of weird that a right wing political party would call itself "red".
2) The opposition party is amazingly known as Partido Liberal Radical Auténtico which means "Authentic Radical Liberal Party". They remain a far distant second in Paraguayan politics because they lack a national vision and are just a collection of spl
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I believe in most countries outside of America red is usually the denominator for liberal and blue is conservative and America like usual we decide to do "our own thing"
https://en.wikipedia.org/wiki/... [wikipedia.org]
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I appreciate you understanding the distinction, liberals are not socialists!
Re:BANK LEFT WING. National Socialism = BANKRUPT (Score:4, Informative)
The association of red with the political left dates back to the French Revolution. A plain red flag was a signal for martial law. It was co-opted by radical revolutionaries, who associated it with the sacrifice of working-class blood.
Later socialist republics like the Soviet Union and China adopted the color for their flags. Perhaps that's how the association was firmly established and persists to this day.
As for liberals ... well, as you and others pointed out here, they're not socialists. But some liberal parties have adopted red as their color (Canada for example.)
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Confused To See This Here (Score:2)
I don't really understand why this is a Slashdot story. But, I was intrigued to read it.
It seems like this is a recoverable situation, given some time. But, if you need to buy food and you can't access your money for a week or three, that's an irrelevant consolation. Once again, the man on the street is well and truly fucked.
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The bank went under the central bank's 50% threshold for solvency.
And the president of Paraguay was involved and he just resigned. Congress voted for his impeachment unanimously.
The bank held a large chunk of the national retirement fund.
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"I don't really understand why this is a Slashdot story"
A DIGITAL BANK (aka TECHNOLOGY) isn't a Slashdot story?
Son where the fuck have you been?
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"News for nerds, stuff that matters." Not every nerd is a programmer, and I've enjoyed many of the off-the-wall articles that have made it to the front page, such as the town that powered its cold-weather shelter from a locomotive during a blackout, or (my favorite) the theft of a million pounds of maple syrup from the Canadian Strategic Maple Syrup Reserve. YMMV
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Well as an Australian, I had been daydreaming about Paraguay as my next hop across the Pacific on vacation. Including a stop over to Argentina and Brazil to visit Iguazu Falls etc.
Paraguay seemed politically, relatively, stable where nothing much happens - until today, it's the ones you least suspect.
See what happens when Democrats win? (Score:2)
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To be fair, Truman started our involvement with Vietnam, although the Repubs seriously escalated it, as Repubs are want to do. (I remember because I lost that argument with my dad when I said the Republicans got us into the Vietnam War.)
Another IMF casualty (Score:2)
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Sure they know, they're those boring statistics that you ignore while looting whatever country you've managed to bribe the politicians into taking out your loans.
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ahhahahahaha (Score:2)
Hahahahaha. I gotta laugh. The president doesn't care that they just got impeached. He got his money, and his family and friends got theirs as well. Most of them have probably already ditched the country. Most of the money is already out of the country and definitely unrecoverable. What a tough lesson. You elect bad leade
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He got his money, and his family and friends got theirs as well. Most of them have probably already ditched the country.
From TFS:
Meanwhile, eight senior Ueno executives have been detained, including founder Miguel Vazquez and bank President Juan Manuel Gustale.
So, no.
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House arrest, most likely, probably unsupervised.
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He got elected in part with ads and astroturf NGO action from the Orwellian-named National Endowment for Democracy, a CIA/State Dept. cutout. Most of the money is probably in Miami and NY banks.
What's the Paraguayan for... (Score:1)
"Alarmist Leaves Out Calming Detail" (Score:2)
From the article;
Under a law rushed through Congress on Wednesday, a state guarantee fund must repay stranded depositors within five business days, starting Thursday with small accounts of up to about $1,600 held by customers with no debts to Ueno. The fund insures up to about $36,000 per customer, which the central bank says will cover the full balances of an estimated 97% of clients.
So people with debts to the failed bank might lose their balance... but they might also lose the balance of their debt. It's unclear.
For most it seems like a short delay in accessibility.
Digital Electronics...greatly missed (Score:2)
As a former Digital employee I resent the use of our logo for a bank failure that has nothing to do with electronics or hacking, just plain old greed and corruption.
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As the face of the US dollar depicted in the title bar, I also strongly protest that my image was used without my consent.
Sincerely,
G. Washington
George is that you ? Sally is pregnant and everyone knows it is yours. Martha is really pissed and is going to cut you off financially.
I'm shocked! (Score:1)
Corruption involving government officials and their friends and families? Say it isn't so.
Put all your eggs in one basket! (Score:2)
All my savings are invested in the Bank of Under the Sealy Posturepedic®...