Bank of Spain governor brings forward departure from post

Miguel Ángel Fernández Ordóñez to leave position in June, a month ahead of end of mandate PP snubs demands for Congress inquiry into Bankia débâcle Top management of failed lender received payments of over 21 million euros last year

Bank of Spain governer Miguel Ángel Fernández Ordóñez.
Bank of Spain governer Miguel Ángel Fernández Ordóñez.JUAN MEDINA (REUTERS)

The ruling Popular Party used its absolute majority on Tuesday to block a request by the left-leaning IU and ICV groups for a debate on whether an ad-hoc committee should be set up to investigate the circumstances that led Banco Financiero y de Ahorro (BFA) and its commercial banking arm to seek a government bailout of 23.4 billion euros, the largest ever in Spanish banking history.

The IU-ICV demand for an inquiry came after BFA-Bankia reported that its directors and other top managers had received remuneration worth 21.783 million euros last year, while one former official was awarded a massive retirement package despite the fact that Spain’s fourth-biggest bank had posted the largest loss ever suffered by a Spanish lender.

The PP is also against hauling former Bankia chairman Rodrigo Rato before Congress, as well as Miguel Blesa and José Luis Olivas, the former heads of Caja Madrid and Bancaja, respectively, two of seven savings banks, or cajas, that were grouped together to form Bankia.

The ruling party also wanted any appearance by the Bank of Spain governor, Miguel Ángel Fernández Ordóñez, to be limited to a closed-door meeting with the sub-committee that oversees the activities of the state Orderly Bank Restructuring Fund (FROB). The PP’s parliamentary spokesman, Alfonso Alonso, argued that the appearance of Fernández Ordóñez before an open session of Congress could fan “political confrontation” and be “counter-productive.”

That prompted Fernández Ordóñez, who has come under heavy criticism from the PP due to the central bank’s handling of Bankia, to bring forward his departure as governor. In a statement posted on the central bank’s website, the governor said that after meeting with Prime Minister Mariano Rajoy, he wanted to step down on June 10, a month before his six-year mandate was due to expire.

 “The prime minister understands that this decision favors an agile and efficient transition in the position of governor, and allows the Bank of Spain to continue to contribute its knowledge and professionalism in the resolution of the problems facing the Spanish economy and its banking system,” the statement said.

BFA’s restated accounts for last year showed that José Luis Olivas’ right-hand man at Bancaja, Aurelio Izquierdo, is entitled to a retirement package of 14 million euros. Bankia insisted that those obligations were contracted by Bancaja prior to the existence of Bankia, and that no bailout funds would be involved.

Izquierdo left Bancaja in October of last year to head up Banco de Valencia, which was also taken over by the Bank of Spain and nationalized.


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