Press room

Legislation

• What is the regulatory capacity of the Banco de España?

  The Law of Autonomy of the Banco de España gives it the power to issue "monetary circulars", which are the specific regulations through which the Banco de España effectively regulates monetary policy, derived from its membership of the European System of Central Banks.

  The Banco de España can also issue other circulars to implement regulations aimed at ensuring the proper functioning of its other fields of competence.

  Both types of regulatory text are published in the Official State Gazette.

  For more information, please refer to the Legislation section.

• What powers are granted to the Banco de España under the Law on Banking Discipline of 1988? Can the Banco de España impose penalties? If so, what type of penalties? What is the applicable procedure?

  The Law on the Discipline and Intervention of Credit Institutions establishes a common system of penalties applicable to credit institutions that contravene prevailing regulations and the senior managers and directors of those institutions.

  Depending on the seriousness of the infringement as defined in the regulations, penalties can vary from a private admonishment to a fine of up to 1% of the institution's equity or the withdrawal of its authorization to operate in the market.

  The Banco de España issues disciplinary proceedings and applies the relevant penalty for both minor and serious infractions. From January 2013 (with the entry into force of the Fourth Final Provision of Royal Decree-Law 24/2012), the Banco de España will also be responsible for imposing penalties for very serious offences, providing reasonable justification for their adoption to the Ministry of Economy and Competitiveness.

  Disciplinary action entails the opening of an investigation, the results of which are notified to the investigated institution, which has one month to put forward the arguments in its defense. Once this term has elapsed, the final proposed decision is drawn up, which must be approved by the Executive Commission and the Governing Council of the Banco de España. Decisions issued by the Banco de España may be appealed to the Ministry of Economy.

• What requirements are set out to practice banking?

  The creation of a bank requires the authorization of the Banco de España (prior to January 2013, with the entry into force of the Fourth Final Provision of Royal Decree-Law 24/2012, the Ministry of Economy shall be responsible for this authorization, following a report by the Banco de España) . Once this authorization has been obtained and the new bank has been incorporated and registered in the Mercantile Registry, it must be entered in the Banco de España Registry of Institutions.

  Aside from these administrative procedures, any organization wishing to carry out banking activity must fulfill the following requirements, among others: 

  • it must set up a public limited company,
  • it must have a minimum share capital of 18 million euros, fully paid up in cash and divided into registered shares,
  • it must restrict the corporate purpose to the activities associated with credit institutions,
  • it must ensure the commercial and professional repute of the owners of significant shareholdings (understood as 10% or more of the share capital, or smaller amounts that nevertheless enable the exertion of significant influence over the organization, determined as such when the owner is able to appoint or dismiss any member of the governing body),
  • it must have a board of directors formed by at least five members, all of whom must be professionals of recognized experience, expertise and good repute,
  • it must have the appropriate administrative organization and accounting structure, and suitable internal control procedures to ensure sound and prudent management of the institution, and
  • It must have its registered office, as well as its effective management and administration, in Spanish territory.

  For a limited period of time, new banks are subject to certain restrictions, such as a ban on paying out dividends in the first three financial years. In addition, during the first five years of the bank's activity, no single company or group may own, whether directly or indirectly, more than 20% of its share capital or effectively control the bank.

  Credit institutions must also comply with the prevailing solvency regulations in the exercise of their activity. With regard to accounting, valuation standards and the duty to inform the supervision authorities, Spanish regulations are more detailed than their Community counterparts, requiring a more exhaustive treatment of credit risk and its coverage (through specific, general and statistical provisions).

• What is the relationship between the Banco de España and the Executive Service for the Prevention of Money Laundering and Monetary Offences?

  The Executive Service for the Prevention of Money Laundering and Monetary Offences (Sepblac) is organizationally and functionally part of the Commission for the Prevention of Money Laundering and Monetary Offences, chaired by the Secretary of State for Economy, in accordance with Law 10/2010 of 28 April, on the prevention of money laundering and terrorist financing. In accordance with this law, the Banco de España exercises competences relating to the Sepblac economic, budgetary and procurement regime, in accordance with the agreement signed with the Commission to this effect. The most notable functions that Law 10/2010 attributes to Sepblac are: 

  • To receive and analyse notifications of suspect transactions sent by parties with a legal obligation to prevent the financial system being used for laundering money obtained from criminal activities and for the financing of terrorism.
  • To supervise and inspect these parties' compliance with the obligations established under Law 10/2010, adapting its actions, in respect of financial institutions, to the agreements signed for this purpose by the Commission for the Prevention of Money Laundering and the supervisory bodies of said institutions.
  • To report, in line with the procedures to create financial institutions, and with the exceptions set forth in regulations, on the adaptation of the internal control measures envisaged for the program of activities, and on the prudential assessment of acquisitions and increased shareholdings in the financial sector.
  • To assist the courts, public prosecutors, judicial police and competent administrative bodies as needed.

  The parties subject to obligations under Law 10/2010 notably include credit institutions, authorized life insurance companies, investment services companies, payment institutions, currency exchange professionals, financial consultancy companies and professional loan and credit intermediaries. The supervisory bodies of financial institutions (including the Banco de España) shall coordinate, with Sepblac, their supervisory actions in relation to compliance with the obligations established under Law 10/2010, through the signing of an agreement with the Commission for the Prevention of Money Laundering and Monetary Offences.

  Sepblac incorporates personnel from the Banco de España, the Ministry of Economy and Competitiveness, the Ministry of Finance and Public Administration, the National Police Corps and the Civil Guard.

  For more information, please visit the Sepblac web page.