Paraguay orders ex-president Pena held over Ueno Bank crisis

A Paraguayan judge ordered former President Santiago Pena held in custody on Saturday over the collapse of Ueno Bank, Turkey's state-run news agency Anadolu Agency reported.

Judge Humberto Otazu ruled that Pena will be kept at the headquarters of the Presidential Escort Regiment in Asuncion, the capital.

Prosecutors had earlier brought formal charges against him of breach of trust, illicit gain from his own dealings and forging public documents.

Pena answered questions from prosecutors at the State Attorney General's Office for almost three hours before being taken back into military police custody.

He was first arrested late on Friday at his private home, where police had to act to disperse protesters gathered outside, and he spent the night under guard at the regiment.

The arrest followed a Senate trial on Friday, in which lawmakers voted to remove him from office for misconduct and poor performance of duties over his government's handling of the financial crisis.

The Central Bank of Paraguay intervened in Ueno Bank on Nov. 3 because of severe insolvency.

The collapse froze deposits belonging to 2.94 million clients, nearly half the country's population, including public institutions and pension funds such as the state-run Social Security Institute.

Prosecutors allege that his administration allowed high-risk public deposits to flow into the private bank beyond legal safety limits, tying his government directly to the failure.

Pedro Alliana, who had been vice president and is also a member of the ruling Colorado Party, began his first full day as president on Saturday.

His government faces immediate pressure to deliver on promises to fully compensate depositors and to restore public confidence in the financial system.

The case centres on public money held in a failed bank and on whether depositors will be fully repaid.