Bank of Spain may revise incompatibility criteria

Decision follows row over nomination of former central bank director general to a private financial sector institution

The governor of the Bank of Spain, Luis Linde.
The governor of the Bank of Spain, Luis Linde.EFE

After a public display of arm-wrestling between the Economy Ministry and the country’s commercial banks over the latter’s intention to appoint a former Bank of Spain director general as head of the Spanish Banking Association (AEB), the central bank said Friday it would study the incompatibility rules applied to such former officials.

The AEB named former Bank of Spain director general for Regulation José María Roldán as head of the AEB but Roldán subsequently withdrew his candidacy amid objections by the Economy Ministry, which argued that it was unethical for someone who previously oversaw banks’ adherence to the rules to subsequently be lobbying for a private body in the financial sector.

The current incompatibility rule for director generals is that they are not allowed to serve with any private institution in the private sector until six months after they have left the Bank of Spain, a condition that Roldán in his case had already complied with.

The incompatibility rule for senior government officials is two years, but as the Bank of Spain pointed out the rules imposed on former director generals are more restrictive in that they are barred from working for any institution in the private sector regardless of whether they were involved or not in any resolution affecting the institution they intend to join. The quarantine period for the governor and deputy governor of the central bank is two years.

Noting the difference between the two incompatibility regimes, the Bank of Spain said it would ask the bank’s secretary general to draw up all necessary reports with a view to adapting its internal proceedings on incompatibility.

The supervisor said it would take into account the criteria used by the European Central Bank, where the incompatibility period is one year.

However, Economy Minister Luis de Guindos has said he wants the rules applied by the central bank to be brought in line with those of the state, potentially leading to another face-off if the Bank of Spain decides to follow the line of the ECB.

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