Pedro Volpe, a 50-year-old writer and lawyer in Paraguay, woke last Tuesday to a message from a friend asking if his bank account was down too. It was the day after payday. When he opened his banking app, he could not even see his balance. He was one of nearly 3 million Paraguayans, roughly 60% of the country's adult population, whose accounts had been frozen overnight.

All were customers of Ueno Bank, a digital lender that the central bank had ordered into resolution on Monday night because it was insolvent. In a country of this size, the failure of a single institution therefore touched a majority of adults at once, a concentration of risk that few regulators anywhere would consider acceptable. The speed of the bank's rise helps to explain the speed of its fall. Since 2023, Ueno had grown from an obscure digital lender into the bank of choice for most Paraguayans.

Opening an account took minutes on a mobile phone, and the investment returns it advertised were far more generous than those of its competitors. Such terms attracted ordinary savers, but they also raise an old question: who pays for returns that look too good? The political damage has been just as swift. Prosecutors are investigating whether President Santiago Peña, who took office in 2023, favoured the bank.