Paraguay’s New President Overhauls Cabinet After Peña Ouster
(Bloomberg) — Paraguay’s Pedro Alliana moved to put his stamp on the cabinet he inherited from his impeached predecessor, Santiago Peña, naming new ministers and asking senior officials from the previous administration to tender their resignations.
Alliana swore in new interior and public works ministers and named a legal adviser among other designations Monday. He also nominated an economist and former securities regulator to lead the central bank in the aftermath of a major banking scandal that took down the nation’s president and led to the resignation of the monetary authority’s previous leader.
Alliana submitted the nomination of Jorge Schreiner, who served on the central bank’s board of directors from 1997 to 1999, to lawmakers Monday, he said in a social media post. Schreiner also led Paraguay’s securities regulator from 2003 to 2013.
Schreiner is set to replace Carlos Carvallo, the former chairman who resigned last week after the central bank intervened in Ueno Bank SA, a major consumer bank that collapsed due to insufficient liquidity. His nomination requires Senate confirmation.
The failure left millions without access to accounts and plunged Paraguay into political turmoil. Former President Santiago Peña, who had business ties to Ueno’s controlling shareholder, was impeached Friday and is currently in pretrial detention after prosecutors charged him with breach of trust and self-enrichment over his alleged role in the bank’s collapse.
Prosecutors and police over the weekend raided a luxurious mansion owned by Peña overlooking Lake Ypacarai, where authorities said they discovered a safe room underneath a swimming pool.
Carvallo was charged with breach of trust, falsifying documents and self-enrichment. The central bank has been operating with just three of its five board members following his resignation and that of another board member last week.
Schreiner’s “experience and track record in the financial system will be essential to strengthening the central bank’s institutional framework and restoring Paraguayans’ trust,” Alliana, who was sworn in as the nation’s new leader on Friday, said in the social media post.
Alliana also said he’d nominated Fernando Rivarola, an economist and former central bank staffer, to fill the other vacant role on its board. As the monetary authority’s director of bank supervision, Rivarola gained prominence earlier this year after the leak of an internal memo he’d authored about alleged irregularities at Ueno. He left the position in July after being named to the board of state development bank AFD.
Ueno had amassed more than 2.9 million clients in a country of roughly 6.1 million people, holding deposits for 17 trillion guaraníes ($2.8 billion), including about $355 million owed to social security agency IPS. The central bank said last week that Ueno clients have started to receive payments from the deposit insurance fund.
(Updates to add cabinet changes in first, second paragraphs)
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