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The Bank of Spain ( es, link=no, Banco de España) is the central bank of Spain. Established in Madrid in 1782 by Charles III, today the bank is a member of the
European System of Central Banks The European System of Central Banks (ESCB) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability t ...
and is also Spain's national competent authority for banking supervision within the
Single Supervisory Mechanism The Single Supervisory Mechanism (SSM) is the first pillar of the European banking union and is the legislative and institutional framework that grants the European Central Bank (ECB) a leading supervisory role over banks in the EU. The ECB d ...
. Its activity is regulated by the Bank of Spain Autonomy Act.


History

Originally named the ''Banco Nacional de San Carlos'', it was founded in 1782 by Charles III in Madrid, to stabilize government finances through its state bonds (''vales reales'') following the American Revolutionary War in which Spain gave military and financial support to the Thirteen Colonies. Although it aided the state, the bank was initially owned privately by stockholders. Its assets included those of "Spanish capitalists, French rentiers, and several treasuries of Indian communities in
New Spain New Spain, officially the Viceroyalty of New Spain ( es, Virreinato de Nueva España, ), or Kingdom of New Spain, was an integral territorial entity of the Spanish Empire, established by Habsburg Spain during the Spanish colonization of the Am ...
" (colonial Mexico). Its first director was French banker François Cabarrus, known in Spain as Francisco Cabarrús. Following the Napoleonic invasion of Spain during the peninsular war between 1808 and 1813, the bank was owed more than 300 million reales by the state, placing it in financial difficulty. Treasury minister Luis López Ballesteros created a fund of 40 million reales in 1829 against which the bank could issue its own notes at Madrid. It did so after renaming itself ''Banco Español de San Fernando'' because the name of the king was
Fernando VII , house = Bourbon-Anjou , father = Charles IV of Spain , mother = Maria Luisa of Parma , birth_date = 14 October 1784 , birth_place = El Escorial, Spain , death_date = , death_place = Madrid, Spain , burial_pla ...
. In 1844 the competing
Banco de Isabel II The Bank of Isabella II ( es, Banco de Isabel II) was a financial institution in Spain, created by a Royal Decree of 25 January 1844Teodora Gómez Herrero, ''Diccionario-guía legislativo español: comprende todas las disposiciones legales que se ha ...
and
Banco de Barcelona Banco may refer to: Places * Banc (Barcelona Metro), also called Banco, a closed metro stop on the Barcelona metro * Banco, Virginia, an unincorporated community * Banco, West Virginia, an unincorporated community * Banco National Park, a nationa ...
were established, followed in 1846 by the
Banco de Cádiz Banco may refer to: Places * Banc (Barcelona Metro), also called Banco, a closed metro stop on the Barcelona metro * Banco, Virginia, an unincorporated community * Banco, West Virginia, an unincorporated community * Banco National Park, a nationa ...
. In 1847, following overexposure in the failing property market of Madrid, the Banco de Isabel II merged with Banco de San Fernando, retaining the latter name. Under the guidance of
Ramón Santillán Ramón or Ramon may refer to: People Given name * Ramon (footballer, born 1998), Brazilian footballer * Ramón (footballer, born 1990), Brazilian footballer *Ramón (singer), Spanish singer who represented Spain in the 2004 Eurovision Song Contest ...
in the 1850s, the bank extended its operations to the cities of
Alicante Alicante ( ca-valencia, Alacant) is a city and municipality in the Valencian Community, Spain. It is the capital of the province of Alicante and a historic Mediterranean port. The population of the city was 337,482 , the second-largest in th ...
and Valencia and took the name, ''Banco de España''. Requiring financial support from the bank to back its civil and colonial wars, the government of Spain granted the Banco de España a monopoly on the issuance of Spanish bank notes in 1874. Construction of the bank's headquarters building began in 1884 at the crossing of the
Calle de Alcalá Calle de Alcalá is among the longest streets in Madrid. It starts at the Puerta del Sol and goes on for , to the northeastern outskirts of the city. Henry David Inglis described it in 1837 as "long, of superb width, and flanked by a splendid rang ...
and the
Paseo del Prado The Paseo del Prado is one of the main boulevards in Madrid, Spain. It runs north–south between the Plaza de Cibeles and the Plaza del Emperador Carlos V (also known as Plaza de Atocha), with the Plaza de Cánovas del Castillo (the location ...
in Madrid. In 1936, 510 tonnes of gold reserves were transferred to the Soviet Union (in an event known as
Moscow gold The Moscow Gold ( es, Oro de Moscú), or alternatively Gold of the Republic ( es, Oro de la República), was 510 tonnes of gold, corresponding to 72.6% of the total gold reserves of the Bank of Spain, that were transferred from their original ...
) corresponding to 72.6% of the total gold reserves of the Bank of Spain. That gold remained there during the Spanish Civil War. In 1946, the government of General Franco placed the bank under tight control. It was formally
nationalised Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
in 1962. Following the restoration of democracy in the late 1970s, the bank began a series of transformations and modernisations which continue to today. On Spain's entry into the
Economic and Monetary Union of the European Union The economic and monetary union (EMU) of the European Union is a group of policies aimed at converging the economies of member states of the European Union at three stages. There are three stages of the EMU, each of which consists of progr ...
in 1994, the Banco de España became a member of the
European System of Central Banks The European System of Central Banks (ESCB) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability t ...
. The Bank of Spain holds 8.84% of the ECB's capital.


Governing structures

The governing structures of the Bank is divided among four branches: * The Governor. * The Deputy Governor. * The Governing Council. * The Executive Commission. The Governor of the Bank of Spain is formally appointed after the Prime Minister of Spain has designated him/her by the
Spanish monarch , coatofarms = File:Coat_of_Arms_of_Spanish_Monarch.svg , coatofarms_article = Coat of arms of the King of Spain , image = Felipe_VI_in_2020_(cropped).jpg , incumbent = Felipe VI , incumbentsince = 19 Ju ...
. The Governor must be a Spanish citizen recognized for his or her competence in monetary or banking matters. When a new Governor is named, the Minister of Economy and Finance, in accord with procedure established by the Congress of Deputies, informs the competent parliamentary commission. The current Governor is
Pablo Hernández de Cos Pablo Hernández de Cos (born January 20, 1971) is a Spanish economist who serves as the 70th Governor of the Bank of Spain, as Chairman of the Basel Committee on Banking Supervision and as Chair of the Advisory Technical Committee of the Europea ...
. The tasks of the Governor include: * Direct the Bank and preside over the Governing Council and Executive Commission; * Take primary responsibility for the Bank's lawfully fulfilling its responsibilities. The Governor has ultimate responsibility authorizing bank contracts and other legal documents and for representing the Bank at justice tribunals; * Represent the Bank in international institutional dealings; * Function as a member of the Governing Council of the Bank and as a member of the General Council of the European System of Central Banks. The Deputy Governor, designated by the national Government on the recommendation of the Governor of the Bank, should meet all of the official qualifications for the governorship. The current Deputy Governor of the Bank of Spain is
Margarita Delgado A margarita is a cocktail consisting of Tequila, triple sec, and lime juice often served with salt on the rim of the glass. The drink is served shaken with ice (on the rocks), blended with ice (frozen margarita), or without ice (straight up). ...
. The Deputy Governor substitutes for the Governor in cases of vacancy, absence or illness, both as director of the Bank and as its representative. Further responsibilities of this office are a matter internal to the Bank, and are delegated by the Governor. Six Bank Counsellors are named by the national Government, on the proposal of the Minister of Economy and Finance, with the involvement of the Governor of the Bank. They must be Spanish citizens recognized for their competence in economics or law. The Deputy Governor is in charge of seven directorates: * General Banking Supervision * General Cash and Branches * General Economics, Statistics and Research * General Financial Stability, Regulation and Resolution * General Operations, Markets and Payments Systems * General Service * General Secretariat The Executive Commission consists of: * The Governor, who presides; * The Deputy Governor; * Two Counsellors. The directors general of the Bank attend the meetings of the Executive Commission, with voice but without vote. The Secretary of the Bank functions as secretary of the Executive Commission, but without voice or vote. The two Counsellors who serve as members of the Executive Commission are designated by the Governing Council, after nomination by the Governor, from among their own members (other than ''ex officio'' members). The Governing Council consists of: * The Governor; * The Deputy Governor; * Six Counsellors; * The director general of the treasury and of financial policy; * The vice president of the ''Comisión Nacional Nacional del Mercado de Valores'' ("Stock Market National Commission"). Council meetings are also attended by the directors general of the Bank and by a representative of bank personnel (elected by a means determined by the Bank's internal rules), both with voice, but without vote. The Minister of Economy and Finance or the ''Secretario de Estado de Economía'' ("Secretary of State for the Economy" may also attend (with voice, but without vote) those meetings of the Governing Council which will deal with matters relevant to their portfolios. They may also submit a motion for consideration by the council. "The Secretary of the Bank functions as secretary of the Executive Commission, with voice, but without vote."


Functions

Banco de España's functions are: * Defining and implementing the Eurosystem's monetary policy, with the principal aim of maintaining price stability across the euro area' * Conducting currency exchange operations consistent with the provisions of Article 109 of the Treaty on European Union, and holding and managing the State's official currency reserves; * Promoting the sound working of payment systems in the euro area; * Issuing legal tender banknotes; * The holding and management of currency and precious metal reserves not transferred to the European Central Bank; * The promotion of the sound working and stability of the financial system and, without prejudice to the functions of the ECB, of national payment systems; * The supervision of the solvency and compliance with specific rules of credit institutions, other entities and financial markets, for which it has been assigned supervisory responsibility, in accordance with current provisions; * Circulating coins and performing on the State's behalf all functions entrusted to it in this connection; * Preparing and publishing data relating to its functions, and assisting the ECB in compiling statistical information; * Providing treasury services and acting as financial agent for government debt; * Advising the government, preparing appropriate reports and studies as required.


See also

* Savings bank (Spain) * Comisión Nacional del Mercado de Valores *''
Money Heist ''Money Heist'' ( es, La casa de papel, link=no, , ) is a Spanish heist crime drama television series created by Álex Pina. The series traces two long-prepared heists led by the Professor (Álvaro Morte), one on the Royal Mint of Spain, and ...
'', a television series in which the Bank of Spain is robbed. *'' The Vault'', a movie about a robbery in the Bank of Spain.


References


External links

* Official site of Banco de Españ
(in Spanish)
*
Ley 13/1994, de 1 de junio, de Autonomía del Banco de España.
Boe.es ank of Spain Autonomy Act* {{authority control Bank of Spain Financial regulatory authorities of Spain Espana Spain Banks established in 1782 Companies based in the Community of Madrid 1782 establishments in Spain Government agencies of Spain