Central bank chief asks to appear in Congress over Bankia

The ruling Popular Party has snubbed an offer by the governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, to appear in Congress to explain the circumstances surrounding the nationalization of Banco Financiero y de Ahorro (BFA) and its listed commercial banking unit Bankia, the leader of the main opposition Socialist Party, Alfredo Pérez Rubalcaba, said Thursday.

Fernández Ordóñez has come in for heavy criticism regarding events at BFA-Bankia. The government ordered it to be taken over because of its heavy exposure to the real estate sector, which has remained in a parlous state since the property bubble burst at the start of 2008.

BFA-Bankia resulted from the amalgamation of seven savings banks, including Caja Madrid and Bancaja.

In an interview with state radio station RNE, Rubalcaba said that Fernández Ordóñez, whose mandate as governor ends shortly, had earlier this month sent a letter to the congressional committee on the economy asking to appear before lawmakers, as had been requested by a number of parties, including the Socialists. “The governor has sent a letter to Congress asking to appear. Why not do so?” Rubalcaba said.

The PP has an absolute majority in the lower house. The ruling party used that majority to block a proposal by the United Left and other left-leaning parties to set up a commission to investigate events surrounding BFA-Bankia.

The PP has complained that Fernández Ordóñez was appointed by the previous Socialist government against its wishes.

Rubalcaba said the Bank of Spain “may have made errors” but warned political parties against criticizing an institution that is an important component of Spain’s credibility.

The European Central Bank and the IMF will supervise an independent audit of Spain’s banks in an exercise aimed at dispelling doubts about the extent of the sector’s problems.

Asked earlier this week if this procedure undermined the prestige of the Bank of Spain, Economy Minister Luis de Guindos said: “Institutions are more important than people and the Bank of Spain as an institution is of the maximum solvency and credibility.”