Paraguay's pro-Israel former president taken into custody over banking crisis

Paraguayan prosecutors have charged former President Santiago Pena, a pro-Israel politician, over a severe banking crisis that left millions of citizens without access to their funds and triggered widespread protests. Pena, who was the nation's youngest president, was removed from office just days after the collapse of a prominent bank he had business ties to.

The indictment alleges that between 2023 and 2026, Ueno Bank S.A. received deposits and loans from public and pension entities, while also making irregular loans to companies connected to the bank's economic group. The 47-year-old economist had previously owned shares in Ueno Holding, the controlling company of the bank, until he sold them last year.

Pena maintained strong connections with Israel, reopening Paraguay's embassy in the occupied Jerusalem in 2024, a move that made his country the sixth nation to do so at the time. His removal as president adds to the challenges faced by U.S. President Donald Trump's network of allies in South America, following the defeat of Trump's preferred candidate, Flavio Bolsonaro, in Brazil's recent presidential election.