- International Monetary Fund
- Published Date:
- August 2003
- Central Bank Law
- Banking Law
- Monetary Unit: A Note
- Decree-Law on the Bretton Woods Agreements, 1958
- Bibliographical Note
Publication of Statutes and Regulations
Statutes, regulations, treaties, and public notifications of other measures are published in the Boletín Oficial del Estado.
The Bank of Spain Law, 1962 1
Note:—The Bank of Spain (Banco de España) received its name by virtue of a Law of January 28, 1856 making it the successor to the Banco de San Fernando, which had been established on July 9, 1823. The Bank took on the character of a bank of issue by virtue of a Decree of March 19, 1874. Other significant phases in the legal history and institutional status of the Bank are marked by the Laws of July 14, 1891, May 13, 1902, and December 29, 1921, and by the Law of December 31, 1946 and the supplementary Decree of July 24, 1947. The Bank is presently governed by Decree-Law No. 18 of June 7, 1962.
Law No. 2 of April 14, 1962 2 prescribed the foundations for the credit and banking system, which will make it possible to adapt the new monetary and credit policies to the new circumstances and prospects of the Spanish economy.
A most important part of the reform is the nationalization of the Bank of Spain, in which are centered such essential functions as the issue of legal-tender notes, the implementation of monetary policy in accordance with the directives of the Government, the control and supervision of private banks, the regulation of the money market and, at the proper time, the supervision of foreign payments [el movimiento de pagos exteriores] and the formation of gold and foreign exchange reserves.
The organization of the Bank of Spain, as established in the present Decree-Law, meets the fundamental demand for constant adaptation to ever-changing circumstances so as to enable the Bank to meet in good time the general requirements of the economy and to maintain its dynamic stability.
To achieve these objectives, it was necessary to make the Bank of Spain more independent in its operations, fashioning its Board of Directors in such a way as to give it a flexible spirit of enterprise with the independence of viewpoint derived from the devotion of full time by each of its members to the work of the Bank, in recognition of the importance of their functions.
Control and inspection of private banks, as well as centralization of general monetary and credit statistics, are essential instruments to enable the Bank of Spain to fulfill its functions as a central bank and bankers’ bank and at all times to act as an agency for regulating economic policy through the functions and powers assigned to it in this field.
The creation of the Central Risk Information Department will enable the Bank of Spain to be the guiding and supporting organ of the private banks in respect of credit policy, in accordance with the directives issued by the Government.
To strengthen the powers of the Bank of Spain vis-à-vis the private banks, the present Decree-Law assigns to the Bank functions which were heretofore entrusted to the General Administration of Banks, Stock Exchanges and Investments, wherewith closer cooperation between the central bank and the private banks is sought, which will no doubt be reflected in a more flexible and fruitful service for the economy of Spain.
A Decree-Law nationalizing the Bank of Spain could not omit precise norms to define the scope of the Bank’s activities, its open market operations, and the important functions of a consultative and informative nature which it must have as the center of monetary and credit policy, in its double capacity as implementing agent of general government policy and central bank and bankers’ bank, and as the organ for receiving and directing to the attention of the public authorities the vicissitudes and needs of the economy in order to meet them as the circumstances of the moment require.
In order to achieve a unity of viewpoint that will allow the Government at all times to know the economic situation and to take timely measures, the necessary ties shall be established between the Bank of Spain, the Institute for Medium-Term and Long-Term Credit and the Credit Institute for Savings Banks, both through the presidency of these institutions being held by the Governor of the Bank of Spain and through the presence of one of the Deputy Governors of the Bank on the boards of these Institutes.
The creation of the new banking and credit structure is obviously urgent in order to adapt the Spanish economy to its new prospects and problems, which in turn require immediate introduction of suitable implementing instruments for the success of the State’s economic policy.
Therefore, in using the power contained in Article 13 of the Law of the Cortes, and having heard the Commission referred to in Article 10 of the Law on the Legal Regime for the State Administration, on the motion of the Council of Ministers at its meeting of May 11, 1962, I Order:
Nature and legal status.
Art. 1. The Bank of Spain shall be a public corporation [entidad de derecho público] with juridical personality and full legal capacity. It shall be subordinate to the Government through the Ministry of Finance.
The initial assets and liabilities of the new institution shall consist of the capital and reserves of the bank which is being nationalized, whose assets and liabilities it shall take over.
Art. 2. The Bank of Spain shall be responsible for the issue of legal-Purpose. tender notes and for their regulation and administration; it shall act as Treasurer for the State and as financial agent in respect of the debt of the State and of the Treasury, and shall perform such other services, permanent or temporary, as the Treasury may stipulate by appropriate agreements; it shall perform all the functions appropriate to its capacity as a bankers’ bank; it shall carry out commercial operations appropriate to banks of that class, with private institutions or enterprises, in the exceptional cases referred to in Article 27 of the present Decree-Law; it shall inform and advise the Government on matters of money and credit and shall exercise functions pertaining to supervision and inspection of private banks and the other functions entrusted to it by law.
Wherever private banks are mentioned in this Decree-Law, and for its purposes, the term is considered to include the Banco Exterior de España.
The supervising of foreign payments and the centralizing of the gold and foreign exchange reserves shall be transferred to the Bank of Spain; however, the functions assigned by existing legislation to the Spanish Foreign Exchange Institute shall continue to be performed under the same ministry as at present, the decision being left to the Government as to when to transfer those functions and such other operative functions as the Government may decide upon, once the circumstances now prevailing in foreign trade have disappeared.
Art. 3. The Bank of Spain shall have, on the technical level, an autonomous organization. It shall be governed in its organization and functions by this Decree-Law, by the By-Laws and by special provisions; in its operations it shall be governed first of all by the same rules and, in addition, by those rules of private law which are applicable to the case in question.
The Bank of Spain shall be considered to be included in the provisions of Article 5 of the Law of December 26, 1958 on the Legal Regime for Autonomous State Entities.
The Bank of Spain shall be exempt from any kind of direct tax, assessment or other charge by the State, provinces or municipalities.
Art. 4. The Governor of the Bank of Spain shall be the head of the Bank’s administration and shall be the Bank’s legal representative.
He shall act as Chairman of the General Council and of the Board of Directors of the Bank. He may delegate such functions as he sees fit to the Deputy Governors.
He shall be appointed and may be dismissed freely by the Council of Ministers.
Art. 5. There may be more than two Deputy Governors, to be called First, Second and Third, as the case may require. The Deputy Governors shall be technical officers and may not be removed, except for reasons of discipline, for a period of three years. They may be reappointed. They shall be appointed by the Council of Ministers on the proposal of the Minister of Finance. They shall assume the directive functions which the Government assigns to them.
When the position of Governor is vacant, or in the absence of the Governor, he shall be replaced by the Deputy Governors in the proper order.
Art. 6. The General Managers, in the number provided in the By-Laws, shall be appointed by ministerial order, on the recommendation of the Board of Directors. They shall perform, on direct instructions of the Deputy Governors, the functions of management, administration and implementation entrusted to them by the Deputy Governors, and shall be required to carry out, and ensure that the staff carries out, all statutory and regulatory provisions, as well as the instructions issued by the Governor, the Deputy Governors and the Board of Directors. They may be required to attend the meetings of the Board of Directors without the right to vote, for the purpose of providing information. They may be dismissed only as provided in the By-Laws.
Board of Directors.
Art. 7. The Board of Directors of the Bank of Spain shall be composed of the Governor, the Deputy Governors, and three members of the General Council of the Bank, designated by the Minister of Finance from among those included in Article 8(c). The members shall be appointed for a period of two years and may be dismissed at any time by decision of the Minister of Finance.
The Board of Directors shall be presided over by the Governor.
Resolutions shall be taken by a majority of votes. In case of a tie, the Chairman shall cast the deciding vote.
The Board of Directors shall have as Secretary, without the right to vote or to be heard, the person performing that function in the Bank of Spain.
Art. 8. The General Council shall be constituted as follows:
- (a) The Governor as Chairman;
- (b) The Deputy Governors;
- (c) Five members designated freely by the Government, on the proposal of the Minister of Finance, representing the general interests of the national economy;
- (d) Two representatives of the private banks, proposed by the High Banking Council;3
- (e) One representative of the Institute for Medium-Term and Long-Term Credit;
- (f) One representative of the Credit Institute for Savings Banks;
- (g) Four representatives of the Syndical Organization;
- (h) One representative of the employees of the Bank of Spain, with at least twenty years of service, proposed by the bank staff.
The appointment of the representatives referred to in items (d), (e), (f) and (h) of the preceding paragraph shall be made by the Minister of Finance, with the prior authorization of the Council of Ministers, on the proposal of the organizations or agencies which they are to represent. They may be dismissed at any time by order of the Minister of Finance.
The General Council shall be convened and presided over by the Governor. Resolutions shall be taken by a majority of votes and in case of a tie the Chairman shall cast the deciding vote.
Powers of Government.
Art. 9. Authority in monetary and credit matters is vested in the Government, which, through the Minister of Finance, shall issue to the Bank of Spain and the various credit organizations the directives to be complied with at each stage in the specific implementation of monetary and credit policy in the manner best suited to the interests of the country.
Powers of Minister of Finance with respect to Bank of Spain.
Art. 10. The Minister of Finance shall, in agreement with the Council of Ministers, without prejudice to the powers conferred on him by this text and other statutory provisions:
- (a) Prescribe the general rules for the Bank’s actions as implementing agent, in the sphere of its competence, of the monetary and credit policy of the Government;
- (b) Prescribe the rules to which the Bank must adapt itself in the exercise of its functions in regard to supervision and inspection of private banks;
- (c) Fix the rates of interest applicable to the Bank’s operations; 4
- (d) Determine the Bank’s action with respect to the purchase and sale, for its own account, of bonds and other securities on the open market;
- (e) Approve the Bank of Spain’s balance sheet and accounts for the fiscal year, which shall be accompanied by a report issued by a committee of the General Council to which inspection of the accounts of the Bank shall be entrusted. This committee shall be appointed annually by the Government, on the proposal of the Minister of Finance.
Duties and Functions of Governing Organs of Bank of Spain
Duties of Governor.
Art. 11. The Governor shall be head of the administration of the Bank, its legal representative, and its liaison with the Government through the Minister of Finance.
He shall represent the Bank of Spain vis-à-vis the Institute for Medium-Term and Long-Term Credit and the Credit Institute for Savings Banks.
He shall decide all questions not reserved for the Board of Directors and shall see to the carrying out of its resolutions. He may delegate his functions to the Deputy Governors as he sees fit.
Functions of Board of Directors.
Art. 12. The Board of Directors shall:
- (a) Decide, taking into account the instructions received from the Ministry of Finance, on the measures to be adopted by the Bank in the exercise of its function as a bankers’ bank and as an organ for supervising and inspecting private banks.
- (b) When the general interest so requires, determine by what advance measures, within the Bank’s sphere of action and having regard for the security of its operations, the Bank can best assist credit institutions which, having acted in accordance with good banking practice, find themselves in cash difficulties as a result of a general crisis or for other reasons;
- (c) Decide on the credit operations with the Treasury and other agencies of the public sector, with due regard to the provisions of Article 21 of this Decree-Law;
- (d) Report on such matters as are assigned to the Bank of Spain by law;
- (e) Decide on the other operations to be carried out by the Bank in the cases referred to in Article 28;
- (f) Issue the reports within the Bank’s sphere of competence concerning special rediscount limits for private banks in cases where this is appropriate in conformity with the laws and regulations on the subject;
- (g) Direct the administration of the Bank and appoint the staff, subject to the provisions of the By-Laws, and fix their remuneration.
Functions of General Council.
Art. 13. The General Council of the Bank shall have the following functions:
- (a) To keep itself informed of the conduct of the business of the Bank and its operations;
- (b) To discuss and formulate the conclusions concerning the annual balance sheet and the operating accounts of the Bank that must be submitted with the balance sheet and operating accounts to the Minister of Finance;
- (c) To advise the Government in respect of those monetary and credit problems on which its advice is solicited;
- (d) To act as consultative organ of the Government and of the Board of Directors on matters submitted to it by them.
It may also submit to the Government, through the Minister of Finance, reports and opinions on the general situation of monetary and credit policy, considering in these reports such solutions as can be technically adopted.
The resolutions of the General Council shall be taken by a majority of votes.
The General Council shall meet at least once a month, when summoned by the Governor.
Functions of Bank of Spain as Advisor and as Implementing Agent of Monetary and Credit Policy
Advisor to Government.
Art. 14. The Bank of Spain shall be the advisory organ of the Government on monetary and credit matters and shall inform the Government, through the Minister of Finance, both on questions on which its opinion is required and on those questions on which it has especially been asked to report. It may also, at its own initiative, submit its opinion to the Government on matters which it consideres relevant, within the scope of its advisory functions.
Statistics and information.
Art. 15. For statistical purposes, all private banks shall submit to the Bank of Spain a monthly balance sheet within the first fifteen days of the month after that to which the balance sheet refers. The Bank may also request of these institutions, on a confidential basis, specific data on the balance sheet and profit and loss account.
The Institute for Medium-Term and Long-Term Credit and the Credit Institute for Savings Banks shall provide the Bank of Spain with monthly balance sheets covering the operations of official credit institutions and savings banks, respectively.
The Bank of Spain may also request of other entities and institutions data and reports necessary for its statistical studies.
Central Risk Information Department.
Art. 16. The Bank of Spain shall establish a Central Risk Information Department in connection with the credit operations of the banks, the savings banks and other credit institutions.
All private banks and credit institutions, regardless of their juridical nature, shall submit periodically to the Bank of Spain all the data on the granting of credits which are required by regulation, in the form to be established. Official credit institutions and savings banks shall submit these data to the Central Risk Department through the Institute for Medium-Term and Long-Term Credit and the Credit Institute for Savings Banks, respectively.
The data which must be reported within the first fifteen days of each calendar month with reference to the operations of the preceding month shall indicate not only the exceptional circumstances which may occur with respect to the credits, such as insolvency, moratoria, and the like, but shall also indicate the credits which, because of their magnitude, may involve a concentration of risk, for which purpose the rules to be prescribed shall indicate the credit accounts subject to this reporting requirement in terms not only of the capital and reserves of the credit institution, but in terms of the solvency of the borrower.
The data which banks, savings banks and credit institutions submit in conformity with this Article shall be classified, in addition, in terms of the economic or professional activities of the borrower, as well as by geographic areas and maturities.
The Central Risk Department of the Bank of Spain shall prepare, on the basis of the data received, general statistics on credit developments in Spain, and within the banking sector shall notify the private banks of cases where the data compiled from various credit institutions indicate that a special risk may be involved or the prudent limits of credit policy might be exceeded.
Irrespective of this notification of exceptional credit cases, the banks may request of the Central Risk Department background information and reports which they consider necessary for their normal operation, being required to maintain secrecy in respect of banking matters. Infractions of this requirement shall be subject to disciplinary action.
In the notifications which the Bank of Spain handles under the above provisions, the designation of the other credit institutions to which the individual or legal entity is indebted shall be omitted.
The development of the services of the Central Risk Department shall be governed by the rules which shall be prescribed for that purpose by the Minister of Finance on the proposal of the Bank of Spain.
Art. 17. The Bank of Spain, as the organ charged with inspecting private banks, shall, with due regard to the rules prescribed by the Minister of Finance:
- (a) Order periodic inspections of the private banks in order to verify that the prevailing rules are being followed with respect to the banks’ balance sheets, the structure of their accounts, interest and commissions applied to their operations and compliance with the general rules on credit policy;
- (b) Notify the boards of managers and directors of banking companies when it considers that the dividend policy applied, while not violating the prescribed rules on the subject, is not appropriate in view of the actual results of their operations and the situation and prospects of their business; if the institution concerned fails to heed the warning, the Minister of Finance, on the proposal of the Bank of Spain, may order that the warning be inserted in the report submitted to the first General Meeting of Shareholders which is held subsequently;
- (c) Order special inspections of a private bank with respect to some phase of its activities, when it sees fit;
- (d) Instruct a bank on the credit policy to be applied by it;
- (e) Propose to the Minister of Finance the penalties to be applied in conformity with the legal rules to be issued on the matter.
The exercise of the function indicated in items (b), (c) and (d) shall be the responsibility of the Governor of the Bank and may not be delegated.
Operations of Bank of Spain
Art. 18. The Bank of Spain shall have the exclusive right to issue bearer notes having legal-tender status.
Determination of the upper limit of the note issue [circulatión fiduciaria] shall be made by resolution of the Council of Ministers on the proposal of the Minister of Finance. The Bank of Spain shall see that the relevant proposal is submitted to the Minister of Finance in good time, accompanied by a report giving the rationale behind the proposal.
Art. 19. The Bank of Spain may decide to retire from circulation and to exchange notes of a given series or type, after an announcement has been made in the Boletín Oficial del Estado and the period for exchange has been indicated.
Notes not presented for exchange within a period of seven years counted from the day following that on which the established exchange period ended shall be considered to have expired.
The amount of these notes shall no longer figure in the liabilities of the Bank, and shall be used for amortization of the Special Debt referred to in Article 23.
Operations with Treasury.
Art. 20. The Bank shall without charge act as Treasurer of the State and financial agent in respect of the debt of the State and of the Treasury.
The services of intermediary in the State’s credit operations, as well as the other services of a permanent or occasional nature rendered by the Bank of Spain to the State, shall be governed by special agreements.
The advances of the Bank to the Treasury shall not exceed twelve per cent of the total annual expenditures authorized for the Central Administration and autonomous agencies, and shall not bear interest.
Credit to public sector.
Art. 21. Apart from the provisions of the preceding Article, the State may use the Bank’s resources for public requirements only by means of a law.
The ceiling for credits which may be authorized by the Bank of Spain for public agencies and national and nationalized enterprises for short-term or seasonal operations shall be fixed by decree, after a report has been made by the National Economic Council.
Excepted are credits to the Treasury for financing the operations of the official credit institutions, which may be authorized by the Council of Ministers, the term and conditions for repayment being fixed. The ceiling for these credits shall be that which corresponds to the increase set each year for the “Investment Bonds” in circulation, and they shall bear interest to be agreed, although the highest rate set for these Bonds may not be exceeded.
Art. 22. The Bank of Spain may increase its present investment portfolio only with the express authorization of the Council of Ministers, on the recommendation of the Minister of Finance.
The securities in the portfolio may not be sold without the express approval of the Minister of Finance.
Art. 23. The Bank shall also maintain in its portfolio until fully amortized the nominal non-interest-bearing bond of the Special Debt now listed among its assets, to which the Laws of March 13, 1942 and December 31, 1946 refer.
The amount of the Bank’s net profit shall be used for the amortization of this Special Debt until it is fully repaid. Amortization shall be carried out in the form and on the conditions prescribed in Article 9 of the Law of March 13, 1942.
As the Special Debt referred to in the preceding paragraph is amortized, the Bank of Spain shall acquire assets or securities to serve as the counterpart of notes in circulation in the same amount as the reductions in the asset value of this debt. The carrying out of the transaction referred to in this paragraph shall be at the discretion of the Minister of Finance.
Art. 24. The transfer, sale, encumbrance or removal abroad of the holdings in gold and silver of the Bank of Spain may be decided only by law.
Account of Spanish Foreign Exchange Institute.
Art. 25. The Bank of Spain shall keep an account in pesetas in favor of the Spanish Foreign Exchange Institute, with such ceiling as the Government, on the recommendation of the Minister of Finance, may propose.
The credit account shall bear interest, to be determined by the Council of Ministers on the recommendation of the Minister of Finance, on the excess amount which is represented by the debit balance of the account in relation to the counterpart in pesetas of the gold owned by the Spainish Foreign Exchange Institute.
The Bank and the Institute may also agree to reduce this account by the transfer of gold by the latter to the former.
Operations of Bank of Spain with private banks. Operations with private sector.
Art. 26. The Bank of Spain may carry out with private banks all operations appropriate to its capacity as a bankers’ bank, with due regard to the general norms prescribed by the Minister of Finance.
Operations with private sector.
Art. 27. Operations shall not be carried out directly with private entities, enterprises or individuals except for reasons of public interest, after authorization in each individual case by the Council of Ministers.
Credit operations now outstanding in favor of private persons or enterprises shall be liquidated within five years.
Open market operations.
Art. 28. The Bank, independently of the investment portfolio it holds, may acquire, possess and sell bonds and other securities for its own account, and operate with this portfolio for purposes of regulating the money market.
It may also receive bonds of the State Debt and the Treasury for further negotiation.
Balance Sheet and Profits
Art. 29. The form of the balance sheet of the Bank of Spain and the accounts which must appear therein shall be approved by the Minister of Finance.
The Bank shall publish its statement of position at least monthly. The statement for the end of the fiscal year shall be published in the Boletín Oficial del Estado.
Profit and loss account.
Art. 30. At the end of each annual financial period, which shall end on December 31, the Bank shall determine the profit account, and the net profits shall be used to increase the Bank’s net worth, taking as the asset counterpart the types of investment which the Minister of Finance, in the interests of the national economy and its expansion, designates as such for each financial period.
Until total amortization of the Special Debt under the Laws of 1942 and 1946, the Bank’s net profits shall be used entirely to amortize it.
Art. 31. The application to the Bank of Spain of the provisions of this Decree-Law and of the By-Laws to be approved by the Government shall not result in a break in the continuity of its accounts, or in a substitution of debtor or creditor in its debits or credits of any kind, or in a change or modification of the ownership or control of its assets and rights.
Art. 32. The Government, on the recommendation of the Minister of Finance, shall determine ineligibility for office resulting from incompatibility between holding other public and private offices and those of Governor, Deputy Governor or members of the Board of Directors of the Bank.
First. The Governor, with the Board of Directors, shall draft and submit to the Minister of Finance the By-Laws by which the Bank of Spain shall be governed. Final approval shall be given by a Decree approved in the Council of Ministers on the recommendation of the Minister of Finance.
Second. Until the new general By-Laws are approved, the present Statutes and By-Laws [Estatutos y Reglamento] shall govern insofar as they are not changed by the present text.5
Third. The Minister of Finance is authorized to prescribe the necessary provisions with respect to the organization and functioning of the Bank of Spain in its transition from the present regime to that established in the present text.
The State is acquiring for cancellation all shares representing the capital of the Bank of Spain, which is hereby nationalized.
The fair price of these shares shall be paid by the State to the shareholders, in the amount, form and periods established in the first of the Final Provisions of Law No. 2 of April 14, 1962 on the Foundations for the Credit and Banking System.6
First. The Ministry of Finance shall finance the credit necessary for the payments which have to be made under the Additional Provision of this Decree-Law in connection with the Final Provisions of Law No. 2 of April 14, 1962 on the Foundations for the Credit and Banking System.6
Second. This Decree-Law, which shall be reported immediately to the Cortes, shall enter into force on the date of its publication in the Boletín Oficial del Estado,7 the Articles of the Law of December 31, 1946 on the Banking System, and other provisions on the subject, being revoked insofar as they are contrary to the present text.
Thus I order by the present Decree-Law, done in Madrid on June 7, 1962.
The Law of the Cortes 1 ARTICLE 10
The full session of the Cortes shall be required to pass upon laws bearing on any of the following matters:
- (b) Important economic or financial operations;
- (d) Banking and currency regulations;
- (e) The economic activity of the syndicates and legislation fundamentally affecting the national economy;
The Credit and Banking Law, 1962 1
The implementation in the near future of a General Development Plan for the Spanish economy calls for a prior examination of the instruments available for successfully undertaking this all-important task. One of these instruments, and perhaps the most valuable, is the banking system and the official credit organization, on which the financing of the Plan will largely depend; it is therefore essential that the groups of institutions which compose these systems should function in a harmonious and well-coordinated manner, without breakdowns, hitches or deficiencies, so that the formation of savings will be stimulated by adequate measures and the funds saved will be appropriately channeled into investment.
This reason alone would be sufficient to establish the necessity and desirability of the reform, but there are also other equally weighty reasons connected with the state of permanent evolution of human societies, in their economic, social and political aspects, as a result of technical progress, the constant aspiration of the peoples to increase their well-being and the ideological trends which encourage these aspirations.
On the other hand, if economic institutions generally need a periodic revision to keep them adjusted to the demands which they have to meet and the economic situation confronting them, the agencies and institutions which regulate and distribute credit and defend the value of the currency, and those which are responsible for directing monetary policy, cannot be an exception—when, moreover, the special reasons mentioned call for a reform at this time.
The history of our legislation also shows the need for a periodic revision of the system. Thus the first Law on the Banking System, enacted in 1856 with the main object of regulating the banks of issue, was followed by that of 1921—owing to the crisis which broke out at the end of the Great War of 1914-18—and later by the Law of 1946, 2 promulgated after the victorious conclusion of the Spanish War of Liberation, when, the main damage caused by that war having been repaired, there began a phase of expansion whose favorable development makes it possible today, once the position reached has been stabilized and consolidated, to embark on a new and more ambitious development plan designed to bring the economy of Spain and the standard of living of its inhabitants up to that of other nations which, in addition to their greater natural resources, had the benefit of substantial and timely foreign aid.
It is also necessary that the reform should be adapted to the principles of the National Movement, promulgated by the Law of May 17, 1958, according to which private initiative, the basis of economic activity, must be stimulated, guided and, ultimately, supplemented by the State; the subordination of the economic values of the individual enterprise to those of a human and social nature must be established; and public credit must be employed and distributed in the most appropriate manner, so that, in addition to fulfilling its purpose of developing the national wealth, it shall contribute to the creation and preservation of small agricultural, fishing, industrial and commercial enterprises, as was stated in Declaration IX of the Labor Code.
In undertaking the reform, it is essential to take note of the lessons of experience to be learned from an examination of the history of central banking, both private and official.
The central bank of issue—which has as its distant ancestor the Banco de San Carlos, which was created in 1782, was later called the Banco de San Fernando, was merged with the Banco de Isabel II and was transformed into the Bank of Spain by the first Law on the Banking System of January 28, 1856—has enjoyed the privilege of issuing notes without interruption since the Decree of March 19, 1874, at the same time acting as the State’s banker and also as a commercial bank; but it has not yet reached the stage of being transformed into a bankers’ bank, the central regulator of the credit mechanism and the body responsible for the external value of our currency, although the second Law on the Banking System of December 29, 1921 tended in that direction, and this tendency was continued by the Law of December 31, 1946 and, lastly, by that of December 26, 1958, although, owing to exceptional circumstances of a temporary nature, it was decided to allocate the last of the functions mentioned to the Spanish Foreign Exchange Institute.
It is clear that, owing to the Bank of Spain, serious problems in Spain’s public finances have been solved, especially during the nineteenth century; critical situations encountered by banks and private enterprises have been avoided or alleviated; and an effective contribution has been made to the promotion of commercial and industrial activity as far as has been possible in view of the nature and structure of the Bank of Spain.
But the State’s continual requests for credit from the Bank, the continual placing with the Bank of public debt issues in exchange for permission to increase the volume of the note issue [circulatión fiduciaria] and the large increase in the amount of the public debt automatically acceptable as collateral, together with the slow but steady monetization of these securities, acted as the driving force behind a monetary expansion which, together with the beneficial effects of the investments thus financed, finally led, by various means, to the depreciation [desvalorización] of the peseta, first within the country and later abroad, and to the exhaustion of the monetary reserves. The stabilization policy was designed to remedy this situation by, among other measures, the fixing of a realistic rate of exchange for the peseta, the abolition of public debt issues freely usable by the holder as security for loans, the cutting down of the rate of expansion of the volume of bank credit and the balancing of the public finances.
It would not, however, be prudent to consider that we have reached the close of the stabilization phase, which is temporary in nature insofar as it represents a stabilizing action but of a permanent character insofar as it means the preservation of what has been attained and the guiding of expansion in such a way as to preserve balance, without defining more closely the powers of the monetary authority and placing the Bank of Spain in the statutory position required by the function which it is called upon to perform, by freeing it of all the handicaps resulting from its present nature, since it has still not entirely lost its original character of a joint-stock company.
As the Spanish State does not accept the principle of economic neutrality, monetary authority cannot be delegated to the bank of issue but is permanently exercised by the Government through the Minister of Finance; on the technical plane, however, it is expedient to entrust the detailed implementation of the policy pursued to the Bank of Spain, giving it an autonomous organization and the responsibility, independence and authority required by its lofty mission as the Government’s assistant, informant and advisor with regard to monetary and exchange policy and the supervision of private banking.
The role assigned to private banking in the great common enterprise of stimulating the growth of the Spanish economy is of prime importance. The history of the Spanish commercial banks is so intimately bound up with that of the country’s economy in general that one can hardly imagine the banking institutions prospering in an environment of poverty and depression, nor is it possible to achieve the greatest measure of development without the corresponding evolution of a prosperous, secure and efficient banking system.
During the past century the banking system, with few exceptions, remained in a rudimentary state owing to the poverty of the country.
The Commercial Code of 1885 had no influence on the development of the banking enterprises; it is true that it sketched the broad outlines of a banking system and devoted a section to the credit companies, but its provisions were not actually put into effect.
It was owing to causes similar to those obtaining in other countries desirous of accelerating their development, together with other factors resulting from the particular course of events in Spain—principally the repatriation of capital owned by Spanish residents of the old colonies, the decline in the inflow of foreign capital after 1914, and the establishment of important industrial undertakings—that the large national banks were created and developed in the direction of a type of mixed bank which, although not precisely defined in the Commercial Code or in other legislation in this field, became a living and productive reality which has continued to exist up to the present day owing to a characteristic phenomenon—the possession by the commercial banks of surplus resources after meeting the demand for short-term credit.
These surplus resources, which were derived from the savings which the Spanish stock exchanges did not receive direct from the public—owing to the small investors’ unfamiliarity with the stock exchange or their lack of financial experience, the excessive cautiousness of savers, or for other reasons—and which went largely to increase the current accounts held at banks, were used by the banks to promote industrial enterprises, either by the direct provision of capital or the granting of credits which, although given against the collateral of securities running for no more than ninety days, were in fact medium- or long-term credits owing to their successive renewals, or by the purchase of shares or bonds of the enterprises on the stock exchange. Because of these methods, whose use was made possible by the latitude and liberality of the system, the deposit and discount banks partly performed the function of the credit companies which, sketchily and inadequately regulated in Articles 175 and 176 of the Commercial Code, were practically nonexistent in Spain.
A fact which illustrates the importance of the phenomenon referred to is that bank deposits increased at a faster rate than the national income in terms of current prices, until, in 1959, they came to represent forty-three per cent of the national income—a percentage which, according to standards generally accepted as being sound, is disproportionately high in relation to the possibilities of investment.
As a result of all this, the banking system was becoming not only the central source of finance but also practically the only one, while the capital market formed by independent investors declined in importance; thus, whereas in the period before the War of Liberation the proportion of total finance to the private sector (issues plus bank credits) supplied by the banking system (in the form of credit plus the increase in holdings of industrial securities) was normally small, being about thirty per cent in the period 1920-35, it was well over sixty per cent in the years 1940-59. In short, the banking system became in practice the main source of finance to the private sector, for both short-term and long-term requirements.
It should be noted that the attainment by the commercial banks of their prominent position in the financial system was assisted by the so-called banking status quo and by a trend toward concentration in large organizations, which, far from facilitating specialization by banks, tended to transform them into many-sided entities. It should also be pointed out that this very diverse and widespread activity of the deposit banks or commercial banks, although rendering obvious services to the economy, did not entirely solve the problem of financing investment and mobilizing short-term funds, since the banks, in their promoting activity, felt obliged to refrain from some special investments and confined themselves mainly to the large industrial enterprises.
The beneficial effects of the banks’ investment-financing activities were often obtained at the cost of the immobilization of their resources, entailing a danger to their liquidity and in some cases, admittedly few and far between, to the safety of the savings entrusted to them.
And, on the other hand, this situation led to a growth in the banks’ influence in private business, so that there were times when they could be said to be pursuing a discriminatory policy in their granting of credit.
It is therefore essential to tackle squarely the problems outlined and to make the necessary adjustments.
The banking status quo needs to be modified so as to give greater freedom; in this respect, however, we should not go further than what is reasonably required for the performance of the service which the banks are called upon to render, and in order to avoid excessive or unproductive tying-up of funds.3
It is also appropriate to continue to use the banks as promoters of investment and providers of medium-term and long-term finance, with the necessary safeguards against the disadvantages and risks of an imprudent immobilization of funds. While, however, suitable regulations should be adopted regarding mixed banking, there should be a shift, as circumstances permit, in the direction of bank specialization, with the establishment of rules for investment banks [bancos de negocios].
Further, as a general measure, it appears desirable to entrust to the Bank of Spain, with its new structure, the task of inspecting all private banking establishments, this function being inseparable from the others which are allotted to it.
Another important sector of banking which is in need of reform is the official sector. The deficiency resulting from the decline in the inflow of foreign capital and the limited possibilities for financing the private sector through the banking system led to the creation of various official credit banks and entities, all of which, except for the Mortgage Bank of Spain, came into being from 1920 onward; these institutions include the Industrial Credit Bank, the Local Credit Bank, the National Agricultural Credit Service, the Central Maritime and Fishing Credit Bank and the Credit Institute for National Reconstruction.
The proliferation of institutions of this type is proof of the heavy demand for credit to finance development projects which has arisen in the last few decades and which it has not been possible to satisfy either with imported capital or through the mixed banks.
In order to unify, simplify and strengthen the financial resources of these entities—since the variety and volume of the securities issued by them created a certain confusion in the market—and to coordinate their activities, the Law of December 26, 1958 was enacted creating the Committee for Medium-Term and Long-Term Credit; the effective cooperation of this committee during the last three years makes it appear advisable to increase its powers and raise it to the status of a State institution with the task of directing the above-mentioned entities, 4 which, so as to be better able to perform their function in the next phase of economic development in full accordance with the requirements of the common good, must be gradually nationalized and reorganized under the direction of the above-mentioned institution—this being furthermore necessary for the coordination of credit policy for the purposes of economic expansion and the procurement by these entities of financial resources from the public sector. An exception should be made only for the Banco Exterior de España, owing to the typically banking form of its financing and its predominantly commercial character.
The reform would not be complete if it did not include measures to revitalize the savings banks and make better use of their substantial resources, their extensive network of branches and their altruistic aims in order to promote and assist agricultural investment, with special attention to the rural cooperatives, and provide aid to the artisan class, small commercial and industrial businesses, those wishing to acquire movable property on a modest scale and, in general, the economic activities which are of importance from the social point of view. For this purpose, and in view of the growing importance of the savings banks, it is necessary to establish for them a central organizing and directing body which, while controlling them, will also act as a link between them and the rest of the banking and credit system.
In connection with the entities which are to take an active part in controlling and distributing credit, it is also necessary to give increased protection to savings, to offer greater, more attractive and safer possibilities for their direct investment, and at the same time to establish regulations regarding the anticipated investment of future savings. To this end, the rules governing investment trusts in their various forms, stock exchanges and installment sales, and such other rules as, while stimulating demand, prevent the improper use of credit, excessive increases in its cost or the undesirable encouragement of inefficient industrial activities, with such limitations as are required from time to time, must be formulated in such a way as to prevent these organizations from becoming instruments for controlling enterprises or dominating the market.
The set of measures of which the reform is to consist shall also include exact rules for disqualifying persons from holding controlling or executive posts in the entities constituting the system, as an additional guarantee that this system will function in such a way as to ensure that the Spanish economy develops in a healthily competitive manner in all its sectors (agriculture, industry and services), that no possibility for the investment of domestic or foreign savings in our country is missed, and that requests for credit can be flexibly and fairly handled without any discrimination beyond that relating to the moral and material standing of the applicant and the desirability of the proposed use of the funds in the light of the country’s overriding interests.
The reform of a mechanism which is so sensitive and has such profound social implications must be carried out step by step and with caution, not only owing to the nature of the banking system but also because of the need to coordinate the measures adopted for this purpose with those of all the complementary sectors of the economy.
Therefore, and in conformity with the recommendations of the Spanish Cortes, I order:
The credit and banking system shall be reformed in accordance with the following bases:
Formulation of monetary and credit policy.
Base 1. Authority in monetary and credit matters is vested in the Government, which, through the Minister of Finance, shall issue to the Bank of Spain and the various credit organizations the directives to be complied with at each stage in the specific implementation of monetary and credit policy in the manner best suited to the interests of the country.5
Bank of issue.
Base 2. The reform shall be centered around a Bank of Spain, which, in order to perform its task, shall be nationalized. Consequently:
(a) The shares of stock shall be transferred to the State upon payment of a fair price, fixed in accordance with the first of the Final Provisions of this Law.
(b) When the shares have been acquired by the State, the Bank shall cease to be a joint-stock company and shall become an official institution with a juridical personality, subordinate to the Government through the Ministry of Finance.
(c) Subject to its character as an instrument of the monetary policy of the Government, the Bank of Spain shall have, on the technical level, an autonomous organization.
(d) To enable it to perform its task more efficiently, the Bank of Spain shall be given a new structure, the organs responsible for the controlling and executive functions being separated from that which, by its essentially consultative nature, is the one in which the interests of the economic sectors should be represented, through the Syndical Organization, together with others appointed by the Government to represent the national interest.
(e) Subject to the flexibility necessary for the development of an economic policy, the creation of money shall be regulated through the channels of credit expansion permitted by the bank of issue, and rules shall be laid down regarding open market operations, rediscount facilities for the private banking system, measures regarding the pledging of public securities as collateral by the banks, variable limits for the legally compulsory deposits to be held by the private banks at the bank of issue, and the other necessary instruments of control.
(f) The task of inspecting the private banking system shall be entrusted to the Bank of Spain, in accordance with the rules laid down by the Ministry of Finance.
(g) The supervising of foreign payments and the centralizing of the gold and foreign exchange reserves shall be transferred to the Bank of Spain; however, the functions assigned by existing legislation to the Spanish Foreign Exchange Institute shall continue to be performed under the same Ministry as at present, the decision being left to the Government as to when to transfer those functions and such other operative functions as the Government may decide upon, once the circumstances now prevailing in foreign trade have disappeared.
(h) The task of directing the Bank of Spain shall be incumbent upon a Governor, who shall be appointed by decree and who shall be aided by more than one Deputy Governor; the latter shall be substituted upon the former’s order and each of them shall be in charge of a group of specialized functions.
(i) The Government, on the recommendation of the Ministry of Finance, shall issue regulations for the holding of directive and executive posts in the Bank of Spain, in such a way that the independence always required for the discharge of their functions by the holders of these posts is ensured, subject to appropriate specification of disqualifications for such posts.6
Medium-term and long-term credit.
Base 3. In place of the present Committee, an Institute for Medium-Term and Long-Term Credit shall be created, with the following characteristics and functions: 7
(a) It shall be the permanent organ for contact between the Government and the official credit institutions. It shall be subordinate to the Ministry of Finance and shall have juridical personality and the necessary capacity to accomplish its purposes.
(b) It shall be responsible for the control and inspection of the above-mentioned institutions, which it shall supply, in a coordinated manner, with sufficient resources to enable them to play an effective part in the policy of economic development; it shall transmit to them general instructions to govern their operations and shall see to it that these instructions are followed.
(c) It shall have at its disposal the financial resources furnished to it by the Ministry of Finance, whether they are derived from Treasury advances, investment securities—subscribed to by institutions or by private individuals—or contributions from abroad, and also, in exceptional cases, from Treasury operations with the savings banks or advances from the Bank of Spain.
(d) It may acquire bearer securities [valores mobiliares], subject to the general credit policy and as the circumstances warrant.
(e) The total volume of credit to be distributed annually by the Institute shall be fixed by the Government, on the recommendation of the Ministry of Finance, after consultation with the National Economic Council.
(f) The Institute shall perform the other functions that are allocated to the Committee for Medium- and Long-Term Credit under current legislation.
(g) The Governor of the Bank of Spain shall act as President of the Institute for Medium-Term and Long-Term Credit.
(h) The directives for coordination between the activities of the Institue and those of the Bank of Spain shall be issued by the Ministry of Finance.
(i) The necessary disqualifications shall be prescribed in respect of the holding of directive and executive posts in the Institute.
Official credit establishments.
Base 4. The Mortgage Bank of Spain, the Industrial Credit Bank and the Local Credit Bank shall be nationalized in such particular form and manner and at such time as the Government shall determine.
Their capital stock shall be transferred to the State upon payment of a fair price which shall be established as provided in the first of the Final Provisions of the present Law.
The Banco Exterior de España shall be excluded from the nationalization, and shall be subject to the same rules and limitations as are imposed on the private banks, without prejudice to such power of intervention as the Government may deem it desirable to reserve to itself insofar as this bank retains the character of an official bank.
The Credit Institute for National Reconstruction, the National Agricultural Credit Service—which shall become the Bank for Agricultural Credit—and the Central Maritime and Fishing Credit Bank shall be reorganized so as to coordinate their activities under the direction of the Institute for Medium-Term and Long-Term Credit and so as to include in their controlling organs adequate representation of the Administration, of the economic sectors—through the Syndical Organization—and of other national interests.
The necessary disqualifications for the holding of directive and executive posts in the official banks and other official credit institutions shall be prescribed by the Government, on the recommendation of the Ministry of Finance.
Savings banks and rural savings institutions.
Base 5. The savings banks shall be reorganized as regards the organ which controls them and their operations, in accordance with the following provisions:
(a) The Credit Institute for Savings Banks shall perform the functions of directing, coordinating and inspecting body for these banks, and shall act as liaison between the savings banks and the Bank of Spain and the Institute for Medium-Term and Long-Term Credit.
It shall be presided over by the Governor of the Bank of Spain and shall be composed of representatives of the savings banks, the economic interests—through the Syndical Organization—and other representatives of the national interest appointed by the Government on the recommendation of the Minister of Finance.
(b) The operations of savings banks shall be reorganized and expanded through the adoption of the necessary rules to enable them to grant, with greater liberality, credits for social ends to owners of farms, to artisans, to small commercial, industrial and fishing enterprises, and to small savers for the acquisition of property—particularly agricultural property, dwellings and bearer securities—and to facilitate as much as possible the granting of credit in the agricultural sector so as to encourage farmers to modernize their farms, thus increasing the financial possibilities for transforming the rural economy, for which reason the activities of the savings banks must embrace agricultural enterprises in general and the cooperative institutions and associations of organized labor [asociaciones de caráeter sindical].
(c) The rural savings banks, whatever their form, shall be reorganized so as to make them more serviceable in the field of agricultural credit. Without prejudice to those regulations to which they are now subject, the Ministry of Finance shall inspect and control the rural savings banks to ensure fulfillment of their own special purposes and the coordination thereof with the general credit policy.
Base 6. The necessary measures shall be adopted to ensure that, without making any sudden change in the present organization of mixed banking, there shall be a tendency toward specialization, bearing in mind the existence of entities which are already concerned predominantly with the industrial sector; and measures to control private banking shall be adopted as follows:
(a) Proclaiming the legal status of industrial and investment banks [bancos industriales y de negocios], giving them as their primary task that of promoting new industrial enterprises, thus stimulating and revitalizing private initiative, and assisting in the task of providing long-term finance.8
(b) Adapting the banks’ portfolios to the prescribed structure and the percentage of public securities; prescribing limits for rediscounting, borrowing against securities and maintenance of reserves at the bank of issue; fixing the liquidity ratio and limiting future purchases by the banks, with their customers’ funds, of shares and participations in companies already operating.
(c) The sale, within the time limits prescribed, of the industrial securities held by each bank in excess of the limit fixed. The appropriate procedures and rules shall be laid down for such sales, both as regards favorable tax treatment for increases in values and as regards progressive percentages and other matters.
(d) In cases where banks act as promoters of new companies, their participation in these companies shall be limited to the percentages fixed in relation to their own resources and to the capital of the enterprises in question.
(e) The necessary rules shall also be prescribed to prevent any subsequent increase in the influence of the present mixed banks over private enterprises, and especially over other banks.
(f) The holding of directive and executive positions in private banks shall be subject, with regard to disqualifications, to the regulations issued by the Government on the recommendation of the Ministry of Finance.
Banking status quo.
Base 7.9 Better facilities and greater freedom shall be given for entry into the banking profession and for carrying on that profession, and the present regulations shall therefore be changed so that:
(a) New banks shall be authorized with a minimum capital which may differ according to the locality of the bank.
(b) The excessive proliferation of branches and agencies shall be avoided by means of objective standards to be established by the Ministry of Finance, with suitably flexible methods through the application of which banking establishments will be created in the number necessary to perform the services required by the national economy.
(c) In all cases the above-mentioned flexible methods shall create the necessary equality of opportunity for all banking enterprises.
(d) The Government, through the Ministry of Finance, shall prescribe rules for the establishment of foreign banks, fixing the precise limitations applicable to them and bearing in mind, as may be appropriate, the principle of reciprocity.
Base 8. The legislation on investment trusts shall be improved, encouraging their development as an instrument for promoting saving and at the same time ensuring, through appropriate regulation by the Ministry of Finance, that they cannot become a means of exercising private control over certain financial sectors.
Base 9. Regulations shall be issued governing the organization, functions and operations of the official stock exchanges, and in particular term operations [operaciones a plazo], strictly prescribing the necessary safeguards to prevent their becoming instruments of dangerous speculation.
Base 10. The financing of installment sales of industrial and agricultural equipment goods and consumer durable goods shall be facilitated by the creation of special entities, in which the State must be represented to ensure the observance of the applicable rules, bearing in mind, above all, the tax advantages and rediscount facilities which can be granted in order to combine the greatest protection of the consumer with the lowest financing costs and with adequate guarantees of the solvency of the purchaser and other participants in the transaction, while at the same time controlling the volume of credit so as to avoid excessive tensions. The bills issued in respect of installment sales may be made rediscount-able up to the amount fixed by the Ministry of Finance.
The implementation of the preceding bases shall take place step by step, at the rate deemed most appropriate by the Government or the Ministry of Finance, in accordance, in each case, with the provisions of the authority concerned.
The Decrees which shall have the force of law shall be issued within a period of two years.
First. The price for the shares of stock of the Bank of Spain and of those official banks which, in accordance with the provisions of this Law, shall be nationalized shall be equal to the average official quotation on the Madrid Stock Exchange during the five-year period from January 1, 1957 to December 31, 1961. For the calculation of said average there shall be taken as mathematical dividend the amounts of the highest and the lowest quotations in each month comprised in the afore-mentioned five-year period, as published in the Boletín Oficial de Cotización de la Bolsa de Madrid, and as divisor the number of changes computed. If said average should turn out to be less than the highest rate quoted for the stock during the calendar year 1961, the equivalent of the highest quotation during said year will be regarded as the price of said securities.
The price determined in conformity with the preceding paragraph shall be increased by five per cent of its amount, and the sum of that price and this increase shall constitute the fair price to be paid by the State, to which there shall be added the lawful interest on the same from the first day of January of the year in which nationalization shall have been decreed, independently of the corresponding dividend for the last year.
Payment shall be in cash within two months following the date upon which the provision decreeing nationalization of the respective institution shall enter into force.
In the first issue of securities representing the State’s debt, priority shall be given to the former owners of shares in an amount equal to that collected as a result of nationalization.
The amounts settled by the State under this provision shall be exempt in every respect from payment of any General Income Tax corresponding to the year in which payment of said amounts is effected.
Second. The necessary credits to effect the payments which are to be made under the foregoing provision shall be made available through the Ministry of Finance.
Done at the Palace of El Pardo on April 14, 1962.
The Decree on Modification of the Banking Status Quo, 1963 1
Base 7 of Law No. 2 of April 14, 1962, on the Foundations for the Credit and Banking System, although drawn up with the amplitude appropriate to a basic law, contains certain clear principles designed to inspire the reform of what is known as the banking status quo, which was established under conditions less favorable than those of today and which, with regard to the creation of new banks and the opening of branches and agencies, imposed a restrictive regime no longer responsive to the situation of Spanish banking or to the demands of the national economy.2
These principles relate to better facilities and greater freedom to enter the banking profession and exercise that profession; to the specification of the minimum capital required for the establishment of newly created banks, according to the various localities; to the precautions which should be taken to avoid excessive proliferation of branches and agencies, through objective criteria which the Ministry of Finance shall establish; to the flexible nature of the methods to be employed in this respect; to the purpose of such methods, application of which will govern the opening of the exact number of banking institutions needed for providing the facilities required by the national economy; and to equality of opportunity for all banking enterprises.
Clearly, all the principles set forth in the Law are equally imperative and they must all, moreover, be harmoniously combined in the rules which will be drawn up to implement Base 7 and to stimulate healthy competition in the expansion of banking activities.
Freedom to create new banks would be purely theoretical if the outlay of such a large amount of capital were required that it would be practically impossible for anyone not already connected with banking to raise it.
Neither would it be faithful to the spirit of the Law to prescribe too rigid rules in the observance of certain objective standards, forgetting the principle of flexibility which presupposes the exercise of discretionary powers, or the principle of safeguarding healthy competition, a concept frequently implied in a subjective approach.
Equally subjective is the weighing of the greater or lesser need for banking facilities, which may sometimes result in certain localities having an objectively sufficient number of banks, which for this reason are more concerned about gathering in the resources of others than they are about making their own available; on the other hand, the objective indices of population, wealth, etc., do not, in their positive aspects, always reveal the need for banking facilities; this need may be due precisely to the underdeveloped condition of a particular region, from which it should emerge with the creative impetus of banking and the assistance of development programs, either official or springing from private initiative.
Then again, equality of opportunity carried to the extreme, without regard to the real situation of each bank and its previous development, would imply that inequality was sanctioned and cause its persistence, a result certainly not envisaged by the legislator.
Finally, it is unquestionable, although the Law does not expressly say so, that the expansion of banks that do not adjust their practices to the prevailing legal precepts should be forestalled.
The Bank of Spain having been charged, since its nationalization and reorganization under Decree-Law No. 18 of June 7, 1962, with the inspection, supervision and control of private banks, should now also be given powers relating to the authorization of new banks along the general lines prescribed by the Government through the Ministry of Finance.
Therefore, having seen the reports presented by the High Banking Council, the Bank of Spain and the National Economic Council, on the recommendation of the Minister of Finance and after deliberation by the Council of Ministers at its meeting on May 16, 1963, I order:
Art. 1. From the date of publication of the present Decree, the creation of new commercial banks may be authorized by the Ministry of Finance, on the proposal of the Bank of Spain and a prior report from the High Banking Council; these banks shall be governed by the norms prescribed, or which may be prescribed, for banks in general, and by the following special regulations:
(a) The security portfolio of the new banks shall be composed exclusively of public funds or the like; except by express authorization of the Ministry of Finance, they may not acquire or possess shares or equities in, or bonds of, other banks, industrial, commercial or agricultural enterprises, or investment trusts, investment companies or other similar institutions.
(b) Banking agencies, companies or enterprises in which other banks hold shares or with which they have officers in common may not have any share in the capital of the new banks.
Art. 2. The minimum capital required for the formation of new commercial banks shall be as follows:
To operate in localities of up to ten thousand inhabitants, ten million pesetas.
To operate in localities of more than ten thousand and up to fifty thousand inhabitants, twenty-five million pesetas.
To operate in localities of more than fifty thousand and up to one hundred thousand inhabitants, fifty million pesetas.
To operate in localities of more than one hundred thousand and up to two hundred and fifty thousand inhabitants, seventy-five million pesetas.
And to operate in localities of more than two hundred and fifty thousand inhabitants, one hundred million pesetas.
These amounts of capital must be contributed in their entirety at the time the bank is formed; nonmonetary contributions are not permitted.
Art. 3. Authorization to establish a new bank will be granted for operation in only one locality, without prejudice to the possible opening of branches or agencies, subject to the legal provisions prescribed, or that may be prescribed, on the subject. The new banks may not apply for the opening of branches or agencies until three years after the date on which they commence their operations.
Art. 4. Authorization shall be granted or withheld discretionally, taking into account the benefit to the national economy inherent in the basic program of the promoters.
The fulfillment of this program shall be taken into account for purposes of future expansion of the bank through the opening of branches or agencies.
Art. 5. Authorization to open branches or agencies by banks now in existence, or by those which believe the provisions of the foregoing articles apply to them, shall be granted by the Bank of Spain in consideration of the need for banking facilities in each locality or district, subject to rules prescribed by the Ministry of Finance.
Art. 6. The Bank of Spain shall submit annually to the Ministry of Finance, after a prior report from the High Banking Council, a plan for the setting up of new banks in localities where they may be thought necessary for any of the following reasons:
(a) Total lack of banking facilities;
(b) Insufficiency in general of the facilities provided, in view of the wealth, population and economic activity of the locality and surrounding area;
(c) Insufficiency of the facilities provided, taking into account plans or programs for the economic development of the locality and surrounding area, or the specific needs of the area;
(d) Advisability of more banking competition in the locality.
A report describing the characteristics of the localities where the setting up of banking offices is proposed, classifying them in accordance with the four groups mentioned in this Article, shall be attached to the plan.
Art. 7. When the annual plan has been approved by the Ministry of Finance, there shall be sent to all banks entered in the Register of Banks and Bankers (except those newly created banks which have not completed their third financial year), through the High Banking Council, the list of localities coming under the plan, the number of offices which may be set up in each, and the group in which each has been placed (of the groups mentioned in the preceding Article).
The High Banking Council shall make this notification within ten days, and in the following month the banks or bankers who are interested may apply to the Bank of Spain to open branches or agencies in the localities included in the annual plan, enclosing with their applications their balance sheet and operating account at the close of the previous financial year, a balance sheet showing the position at the end of the month prior to that of the application, and a brief memorandum outlining the program of activities they propose to carry out in each of the localities in group (c) where they aspire to establish themselves, if so authorized.
Art. 8. General plans, which can be carried out by annual stages, may also be submitted by the Bank of Spain to the Ministry of Finance in the manner described in Article 6.
Art. 9. Applications will not be considered from banks which are not maintaining the cash, liquidity and guarantee ratios in effect on the date of the application, or which in any way may be failing to comply with the regulations in force for the supervision and control of private banking, or which have had sanctions imposed on them in the preceding twelve months, in accordance with Article 57, and others to the same effect, of the Law on the Banking System of December 31, 1946, or regulations which may be prescribed pursuant to Article 17 of Decree-Law No. 18 of June 7, 1962; or which in past years have failed to carry out the plan of activities referred to in Article 7 or the basic program referred to in Article 4.
Applications from banks not having sufficient expansion potential to establish themselves in the locality they desire, in conformity with the objective standards prescribed by the Ministry of Finance for assessment of such potential, shall also be rejected.
Art. 10. The Bank of Spain may at any time carry out such checks and inspections as it deems advisable for the strictest observance of the rules established in the present Decree.
It shall also verify the performance of the programs of activities on the basis of which the offices in category (c) of Article 6 were allocated. Failure to execute these programs, and other infractions of this Decree, may be penalized by sanctions, in accordance with Article 57 of the Law on the Banking System of December 31, 1946 or with Article 17 of Decree-Law No. 18 of June 7, 1962 and the rules which implement it.
Art. 11. Any claims which banks or bankers may make in relation to the matters regulated in the present Decree shall be submitted to the Bank of Spain, which will pass them on with its report, together with a report it shall previously request from the High Banking Council, to the Minister of Finance, who will pronounce a decision against which no recourse may be had through government channels.
Art. 12. Any legal provisions conflicting with those established in the present Decree are hereby repealed.
Art. 13. The Minister of Finance is empowered to prescribe such supplementary or explanatory regulations as may be necessary for the implementation and better performance of the provisions of this Decree, as well as to establish the procedure and priorities which the Bank of Spain must observe when granting authorization for the opening of banking offices included in the plans referred to in Articles 6 and 8, in conjunction with the basic provisions of Law No. 2 of April 14, 1962.
Thus I order by the present Decree, done in Madrid on June 5, 1963.
Order Implementing the Decree on Modification of the Banking Status Quo, 1963 1
Law No. 2 of April 14, 1962 on the Foundation for the Credit and Banking System provides in Base 7 that better facilities and greater freedom shall be given for entry into the banking profession and for exercising that profession, by modifying the present regime known as the banking status quo in accordance with the principles stated in that base.2
In Decree No. 1312 of June 5, 1963, there were indicated the fundamental outlines of the system for the creation of new commercial banks and the establishment of banking offices, and the Minister of Finance was authorized to issue supplementary rules and clarifying statements, as well as to set up the procedure and priorities to be observed by the Bank of Spain in granting the appropriate authorizations for the opening of branches and agencies.3
The National Economic Council, the Bank of Spain and the High Banking Council all duly presented the relevant reports.
By virtue of these reports, this Ministry orders as follows:
1. Authorizations by the Bank of Spain in connection with the opening of bank branches and agencies included in the annual plans to which reference is made in Article 6 of Decree No. 1312 of June 5, 1963 (hereafter referred to as “the Decree”), shall be granted in conformity with the rules therein established and those included in the following clauses.3
2. The Bank of Spain shall draw up the annual or general plans referred to in Articles 6 to 8 of the Decree, utilizing whatever sources of information it may consider suitable, including studies made by its branches regarding the respective geographical boundaries and, within the time limits that the Bank of Spain may stipulate, suggestions made by private banks and bankers in the interests of improved facilities; these suggestions will not imply commitment or obligation, nor will they entail any kind of preferential treatment for those who make them.
3. Independently of the plans mentioned above, the Bank of Spain shall draw up, annually, a list of the banks to which none of the objections mentioned in Article 9 of the Decree apply, and which have expansion capacity as described in Clause 4 of this Order.
In this list there shall be established the total financial capacity of each bank, the portion of the capacity utilized, and the difference between the one and the other, which will be referred to as the unutilized capacity.
The Bank of Spain shall communicate with each bank or banker, whether or not included in the said list, to inform them, if they are included, of the expansion capacity attributed to them and, if they are not included, of the reasons for exclusion. Those concerned may protest within one month, counted from the day following that of receipt of the communication, and the Bank of Spain, on prior report of the High Banking Council, shall notify the Ministry of Finance of its opinion on the procedure it considers best to follow, save in a case of factual error which can be corrected by the Bank itself.
4. The expansion capacity of banks shall be determined by the sum of their own and outside resources on the basis of their balances on the date specified for this purpose; for the second banking expansion plan this date shall be November 30, 1964; for subsequent plans it shall be indicated by this Ministry upon the proposal of the Bank of Spain.
The amount of the paid-up capital and the reserves expressed in pesetas shall be considered as the bank’s own resources.
The sum of the balances in pesetas representing sight accounts, savings accounts and short-term investments shall be the figure for the total outside resources.
The expansion capacity utilized shall be determined, for each banking enterprise, by applying to its offices established on national territory the figures shown in the scale below.
When the figure for the capacity utilized has been deducted from the total expansion capacity, the result, if positive, will represent the future expansion capacity.
For an assessment of the capacity utilized, as well as for application of the future expansion capacity, the total resources required for each locality shall be computed in accordance with the following scale:
First group: Localities with more than 1,000,000 inhabitants, four hundred million pesetas
Second group: Localities with 500,001 to 1,000,000 inhabitants, two hundred and eighty million pesetas
Third group: Localities with 250,001 to 500,000 inhabitants, one hundred and sixty million pesetas
Fourth group: Localities with 100,001 to 250,000 inhabitants, one hundred and twenty million pesetas
Fifth group: Localities with 50,001 to 100,000 inhabitants, ninety-six million pesetas
Sixth group: Localities with 25,001 to 50,000 inhabitants, eighty million pesetas
Seventh group: Localities with 10,001 to 25,000 inhabitants, sixty million pesetas
Eighth group: Localities with 10,000 or fewer inhabitants, thirty-two million pesetas
Likewise, the resources necessary for each urban agency shall be assessed in accordance with the following scale:
- Localities in the first group: one hundred million pesetas
- Localities in the second group: seventy million pesetas
- Localities in the third group: forty million pesetas
- Localities in the fourth group: thirty million pesetas
- Remaining groups: twenty million pesetas
The capacity utilized by local and regional banks shall be computed at twenty-five per cent and fifty per cent, respectively, of the figure for the localities in which their offices are established.
These reductions shall not be applied to banks which, in the judgment of the Bank of Spain, have ties or connections of any kind with other banking institutions.
When the future expansion capacity, determined for each banking enterprise by application of the preceding standards, exceeds one thousand million pesetas, the excess shall be multiplied by the following adjustment coefficients:
- Second thousand million: 0.75
- Third thousand million: 0.50
- Fourth thousand million: 0.25
- Remainder: 0.10
5. As an exception to the above provisions, the expansion capacity of the banks or bankers referred to in the third paragraph of Article 6 and the precepts relating to it in Decree-Law No. 56 of December 6, 1962 shall be reduced by a percentage equal to that represented by the excess of the bank’s portfolio of industrial securities, plus the illiquid assets in the form of buildings and movables, in relation to its capital and reserves.4
In any case, the expansion capacity shall be considered a negative quantity in the case of banks or bankers whose illiquid assets in the form of buildings and movables exceed the total of their capital and reserves.
6. The expansion capacity available to a bank for purposes of each annual plan or program shall be computed as a percentage of its total unutilized capacity, equal to the result obtained when the sum of the allowances for the localities included in the annual plan or program is expressed as a ratio of the future expansion capacity of the entire Spanish banking system, assessed in accordance with the rules of Clause 4 above. When the computation has been made, the fractions over five hundred thousand pesetas shall be raised to one million pesetas, and those below this figure shall be disregarded.
7. Except as stipulated in Clauses 8 and 9, a sole applicant, provided that he satisfies the requirements established in the Decree and in this Order, shall be assigned the localities included in the annual plan or program.
Localities for which there is more than one applicant shall be allocated according to the following list of priorities:
First: Local banks operating in a single province, as far as localities of that province are concerned
Second: Local banks operating in only one area, as far as the localities in that area are concerned
Third: Any other local banks, as far as the localities in the areas in which they operate are concerned
Fourth: Regional banks, as far as the localities in the areas in which they operate are concerned
Fifth: National banks and others not favored by the above priorities
The areas referred to in preceding, and also in succeeding, paragraphs are those established in Article 3 of the Decree of October 16, 1950 approving the organization of the High Banking Council.
Selection will be made among the applicants, subject to the priorities mentioned, as far as their expansion capacity in the year allows.
Within each group, allocation of the localities will be made by assigning one successively to each of the banks included in the group. The allocations shall be made in the order in which the localities were requested, and, for the purposes of these successive allocations, a list shall be made of the banks in order of quotient (beginning with the largest quotient). This quotient is obtained by dividing the total expansion capacity by that utilized, both figures having been computed in accordance with the provisions of this Order and with reference to the position and balance of each bank at the end of the year previous to that in which the selection is made. When a locality has been assigned to each of the banks in the group, beginning with the one having the largest quotient, new allocations shall be made if necessary.5
8. Banks or bankers who, in the judgment of the Bank of Spain, have connections or relationships with any of those already established in the locality in question, except with industrial or business establishments, may not select offices in group (d) of Article 6 of the Decree.
9. The Bank of Spain may withhold the right of choosing localities in group (c) of the said Article 6 from those banks whose program of activities for such localities, presented in compliance with Article 7 of the Decree, it considers insufficient or inadequate for the needs of these localities.
10. As an exception to the provisions established in the foregoing clauses, banks operating in only one province may establish themselves in the capital of that province, using for this purpose up to one hundred per cent of their total expansion capacity, and in any other locality of the same province, using up to fifty per cent of that capacity, provided the capital or locality in question is included in the annual plan or program of expansion of the banking system.
If two or more banks should wish to take advantage of this provision, the bank having the greater quotient (the result of dividing its total expansion capacity by the expansion capacity utilized) shall have priority.
11. Regional and local banks, if unable to establish themselves in their areas of activity in any given year, may reserve and utilize their expansion capacity for that year in the following year.
12. If insufficient fractions result for selection of a locality, after application of the respective expansion capacities of the competing banks to the localities included in the annual plan, those showing fifty per cent of the required capacity for establishment in the locality shall be rounded off in the order of priority indicated in Clause 7.
For adjudication of localities included in the next annual plan, the utilizable expansion capacity of the bank favored by the rounding off shall be reduced by the same figure as that previously added, and in the same manner the expansion capacity of the banks, not utilized under the previous plan, shall be increased.
13. The number of inhabitants in each locality shall be determined in accordance with the latest census published by the National Institute of Statistics.
14. Within not more than six months, the Bank of Spain shall draw up the first of the annual plans stipulated in Article 6 of the Decree and, when this is done, shall give this Ministry an account of the operations carried out and their results.
The Bank of Spain, when submitting the second annaul plan to this Ministry, shall propose retention or modification of the rules included in this Order, and particularly of the scales and coefficients indicated in Clause 4.
The Decree-Law on the Institute for Medium-Term and Long-Term Credit, 1962 1
Base 3 of Law No. 2 of April 14, 1962 on the Foundations for the Credit and Banking System orders the creation of the Institute for Medium-Term and Long-Term Credit to replace the present Committee, and indicates its characteristics and functions within the normative limits appropriate to measures of this kind.2
The creation of this Institute as a keystone of the new credit and banking system corroborates and reinforces the results of the experience gathered in the last few years through the effective action of the Committee established by the Law of December 26, 1958, completely filling the institutional gap which had existed in the field of official medium-term and long-term credit, which could not be filled satisfactorily until now because of the inadequacy of the Committee’s resources and, even more, because of the lack of a top-level organ of direction and control to assume the task of directing and inspecting the official credit institutions so as to assure that they all contribute in a coordinated and harmonious fashion to the implementation of the Government’s policy with respect to the balanced growth of the national economy.
The problem of organizing medium-term and long-term credit, fundamentally of an investment nature, becomes more pressing at this time when the Government’s efforts are directed to the implementation of an important program of economic development, which requires diligent and adequate mobilization of all available resources, with special consideration to sectors toward whose financing the credit assistance of the official banks and other credit institutions referred to in the first and fourth paragraphs of Base 4 of the above-mentioned Law of April 14, 1962 is channeled.
The coordinated direction of the institutions forming the official credit system also requires a unification of the sources of funds which, apart from the advantages derived from greater clarity and simplification from the financial viewpoint, will permit the terms of the operations carried out by official credit institutions to be adapted more easily at any time to the changing needs of the economy.
Since the Institute is to be the agency most closely connected with government policy in the new system, the ministerial and syndical representatives will be more numerous than in the Bank of Spain and the Credit Institute for Savings Banks.
Without prejudice to the immediate nationalization of the banks and the reorganization of the institutions mentioned above, 3 it is obviously desirable for the Institute for Medium-Term and Long-Term Credit to take part immediately in the performance of the functions which are conferred upon it by this Law and which, by their nature, require urgent attention.
The tasks entrusted to the Institute require flexible procedures. For this purpose, in its internal organization there shall be, in addition to the widely representative General Council, another of more limited composition, as well as a General Manager who shall carry out the executive functions with the necessary diligence; externally, the top-level direction of the official credit institutions shall be effected mainly through the instructions that the Institute transmits to them, as frequently and forcefully as the circumstances require, and through the suspension of resolutions adopted by these institutions, where necessary, by means of a formula for final, rapid and flexible decision.
The same urgent reasons as those indicated above with respect to the creation of the Institute for Medium-Term and Long-Term Credit require that it be given from the outset resources to allow it to carry on without a break in continuity the action of the Committee which it is replacing.
Therefore, on the motion of the Council of Ministers at its meeting on May 11, 1962, and using the authority conferred on me by Article 13 of the Law of the Cortes, I order:
Art. 1. Authority in credit matters is vested in the Government, which, through the Minister of Finance, shall issue the directives to be complied with at each stage in the specific implementation of official credit policy in the way best suited to the interests of the country.
Art.2. In fulfillment of the third Article of Law No. 2 of April 14, 1962 on the Foundations for the Credit and Banking System, the Institute for Medium-Term and Long-Term Credit is created as a public corporation [entidad de derecho público] which shall be the permanent liaison between the Government and the official credit institutions.
It shall be under the control of the Ministry of Finance and shall have juridical personality and full legal capacity to fulfill its purposes; however, the provisions of the Law of December 26, 1958 on the Legal Regime for Autonomous State Entities, in Article 5 of which it shall be considered to be included, shall not be applied to it.
Art. 3. The top-level direction and inspection of official credit institutions shall be performed by the Institute, which shall provide them in a coordinated way with sufficient resources to enable them to act effectively in respect of the policy of economic development; it shall transmit to them the general instructions to which their operations are to be adapted and shall see that they are carried out.
Art. 4. The Institute shall have at its disposal the financial resources furnished to it by the Ministry of Finance, derived from the following:
- (a) The issue of “Investment Bonds” issued under the Law of December 26, 1958;
- (b) Treasury advances;
- (c) Loans from foreign governments and other funds which may be obtained through credit transactions with international institutions and in general with those having foreign contacts;
- (d) Loans arranged with the Bank of Spain on authorization of the Council of Ministers.
Irrespective of these resources, the Institute for Medium-Term and Long-Term Credit shall be endowed with an initial capital of one hundred million pesetas which may be invested in movable or immovable property of any kind.
Art. 5. In special cases, and with the authorization of the Minister of Finance, the Institute may obtain funds by means of cash operations, if the maturities do not exceed six months, with banks and savings banks or through advances from the Bank of Spain.
Art. 6. The Institute for Medium-Term and Long-Term Credit shall be exempt from any kind of tax, assessment or other charge by the State, provinces or municipalities, provided that the taxation is direct.
Art. 7. The Minister of Finance, in conformity with the provisions of Article 1, shall transmit to the Institute for Medium-Term and Long-Term Credit the directives to be followed in each period, and the Institute shall adjust its instructions to the official credit institutions to those directives.
Art. 8. The total figure for the resources to be allocated annually to the official credit institutions by the Institute, and the general norms for their distribution by sector and application in credit operations, shall be fixed by the Government on the proposal of the Minister of Finance, after receiving a report by the National Economic Council concerning this total figure.
Art. 9. So that the Institute may better carry out its directive functions vis-à-vis the official credit institutions, the General Manager of the Institute may attend meetings of the boards and administrative organs of these institutions, without taking part in their discussions except to make comments concerning the compliance with the laws, the norms established by the Government or the Ministry of Finance, or the general instructions issued by the Institute; for this purpose, the notice convening such a meeting shall always be accompanied by the agenda and a note on the matters included therein.
Equally, the official credit institutions shall send to the Institute for Medium-Term and Long-Term Credit copies of resolutions adopted and any other reports, balance sheets and statistical data requested by the Institute.
When the General Manager of the Institute, if he attends the meeting, or the President, or any member of a board or administrative organ of an official credit institution considers that a resolution adopted is not in conformity with the laws, rules and instructions referred to in the first paragraph of this Article, the applicability of the resolution shall be suspended at his request and a reasoned inquiry shall be submitted immediately to the Institute for Medium-Term and Long-Term Credit containing the special plea presented by the one who has requested the suspension, and the Institute shall confirm or revoke the resolution within fifteen days, after which, unless a decision is made to the contrary, the resolution will be tacitly understood to have been revoked if the suspension is at the initiative of the President or the General Manager of the Institute, and confirmed in other cases.
Art. 10. As agency for inspecting the official credit institutions, the Institute shall:
- (a) Order periodic inspections of those institutions in order to verify compliance with the instructions given to them and with the rules of all kinds which they are to follow in their actions;
- (b) Carry out special inspections of an official credit institution on any aspect of its activities;
- (c) Give provisional approval to the budgets and expenditure accounts of the official credit institutions, which shall be submitted by the President of the Institute for final approval by the Minister of Finance;
- (d) Issue reports on balance sheets and annual accounts of the official credit institutions, which must be forwarded annually to the Institute for submission to the Minister of Finance.
Art. 11. The Institute for Medium-Term and Long-Term Credit shall also have the following functions:
(A) It shall grant special credits for specific productive investments which are considered desirable, in harmony with plans or programs for the economic development of the nation approved by the Government, and propose to the Minister of Finance special credits to enterprises, when necessitated by serious reasons of an economic or social nature.
Once the granting of such credits has been decided upon, the Institute may assign the responsibility for handling them to such credit institution or institutions as it considers most suitable, furnishing them with the necessary funds.
The credits mentioned in the first paragraph of this clause (A) may be granted only when the need for them and the difficulties of the requesting enterprise in obtaining funds through ordinary channels of finance have been considered, and in each case the conditions under which these credits are to be repaid shall be established and repayment made as soon as the impossibility or difficulty disappears.
(B) It shall authorize the issue or placing in circulation of obligations or other fixed-income securities in conformity with the Decree of September 6, 1961.
(C) It shall authorize the private banks and the Banco Exterior de España to grant credits for periods exceeding eighteen months or to make use of special rediscounts at the Bank of Spain, subject to the provisions of the Decree-Law of August 2, 1960 and related regulations.
(D) It shall handle, study and propose decisions on petitions to obtain tax reductions as referred to in the Decree-Law of October 19, 1961, in accordance with the rules prescribed for implementing that Decree-Law.
(E) It shall purchase and sell bearer securities as circumstances require.
(F) It shall perform the other functions conferred on it by statutory provisions or which may be delegated to it by the Minister of Finance.
Art. 12. The head of the Institute for Medium-Term and Long-Term Credit shall be its President, who shall also be President of the General Council and the Executive Council of the Institute.
The administration of the Institute shall be carried out by a General Manager, who shall serve in a technical capacity and be in a category similar to that of the Deputy Governors of the Bank of Spain. He may be appointed and dismissed freely by the Council of Ministers on the proposal of the Minister of Finance.
Art. 13. The General Council of the Institute for Medium-Term and Long-Term Credit shall be composed as follows:
President: the Governor of the Bank of Spain
Vice-President: the Assistant Secretary of the Treasury and Public Expenditures
- (a) the General Manager of the Institute
- (b) one of the Deputy Governors of the Bank of Spain
- (c) the Commissioner of the Development Plan and one representative each from the Ministry of Finance, the Ministry of Agriculture, the Ministry of Industry, the Ministry of Commerce, the Ministry of Labor, the Ministry of Information and Tourism, the Ministry of the Interior and the Ministry of Housing
- (d) four representatives of the Syndical Organization
- (e) one representative of the private banks, on the proposal of the High Banking Council
- (f) one representative of the Credit Institute for Savings Banks
The appointment of the representatives referred to in items (d) et seq. of the preceding paragraph shall be made by the Minister of Finance on the proposals of the agencies or institutions which they are to represent. They may be dismissed at any time by order of the Minister of Finance.
Secretary: the Secretary of the Executive Council, without the right to vote or to be heard.
Art. 14. The Executive Council of the Institute for Medium-Term and Long-Term Credit shall be composed of the following members of the General Council:
President: the Governor of the Bank of Spain
Vice-President: the Assistant Secretary of the Treasury and Public Expenditures
Members: the General Manager of the Institute, the Deputy Governor of the Bank of Spain and three other members of the General Council appointed by the Minister of Finance.
The Executive Council shall appoint, from among the staff of the Institute, a Secretary, who shall not have the right to vote or to be heard.
Other members of the General Council may also be summoned to the meetings of the Executive Council when general matters are to be handled which fundamentally affect the ministries or interests they represent.
Art. 15. Resolutions of both the General Council and the Executive Council shall be adopted by a majority of the votes of those present at the meeting, the President casting the deciding vote in case of a tie.
At the express request of one of the members of either of the Councils, the application of a resolution may be suspended and the matter turned over to the Minister of Finance for decision.
Art. 16. The General Council and the Executive Council shall be convened and presided over by the Governor of the Bank of Spain; in his absence, by the Vice-President; and in the Vice-President’s absence, by the most senior member [el Vocal de más edad].
Art. 17. The President of the Institute for Medium-Term and Long-Term Credit shall be its head of administration and shall, through the Minister of Finance, be its liaison with the Government. Similarly, he shall represent the Institute in its relations with the Bank of Spain and with the Credit Institute for Savings Banks.
He may delegate such functions as he sees fit to the General Manager.
Art. 18. The General Council shall:
- (a) Distribute annually among the official credit institutions the resources decided upon by the Government, according to the rules fixed by the Minister of Finance, in conformity with the provisions of Article 8 of this Decree-Law;
- (b) Be informed monthly of the trend of official credit in general;
- (c) Discuss and formulate such conclusions as it deems necessary concerning the Annual Report on developments in the official credit sector and on the balance sheets and accounts of the official credit institutions before they are submitted to the Ministry of Finance;
- (d) Advise the Government on questions raised concerning official credit;
- (e) Act as consultant to the Executive Council on matters submitted to it by that body.
Art. 19. The Executive Council shall perform all the functions entrusted by this Decree-Law to the Institute for Medium-Term and Long-Term Credit other than those expressly assigned to the General Council or the President.
Art. 20. The General Manager of the Institute shall:
- (a) See to the carrying out of the resolutions of the General Council and of the Executive Council;
- (b) Direct the administration of the Institute, act as chief of its entire staff, make recommendations to the Executive Council on the appointment, remuneration and dismissal of the staff, and organize the work of the offices;
- (c) Prepare files on matters to be submitted to the General Council and the Executive Council, request the carrying out of studies and the furnishing of reports which are to figure in the files and draft the proposed decision;
- (d) Draft the budget and annual expenditure account for the administration of the Institute, for submission to the Executive Council;
- (e) Sign all documents and communications to be issued by the Institute, except those directed to ministers or those which must be signed by the President;
- (f) Draft the Annual Report referred to in item (c) of Article 18 of this Decree-Law;
- (g) Propose to the President the special measures which he considers should be adopted and the acquisition, as circumstances require, of bearer securities and their sale.
Art. 21. A special credit of one hundred million pesetas is granted under the current budget, Section 26, Ministry of Finance, Chapter 610, Service 531, Ministry, Undersecretary and General Services, item 531,611, “To form the initial capital of the Institute for Medium-Term and Long-Term Credit” referred to in Article 4 of the present Decree-Law.
The amount of the above-mentioned credit shall be covered in the manner established in Article 41 of the current Administration and Accounting Law.
To meet the ordinary expenses occasioned by the functioning of the Institute, such percentage as the Ministry of Finance may decide shall be deducted from the interest on funds the Institute receives for distribution to official credit institutions.
Art. 22. The Government, on the proposal of the Minister of Finance, shall determine the incompatibilities between holding the offices of President, General Manager, and other members of the Executive Council of the Institute and other public or private offices.
Art. 23. The officers of the staff of the Ministry of Finance who are designated to render services to the Institute for Medium-Term and Long-Term Credit shall, on the proposal of the Institute and by order of the Minister and Chief of Department, be considered to be in active service status for all purposes.
Art. 24. The Minister of Finance is authorized to prescribe the regulations necessary to carry out the provisions of this Decree-Law, which shall be reported immediately to the Cortes.
Art. 25. Articles 1 to 4 and 6 to 10 of the Law of December 26, 1958 on Official Medium- and Long-Term Credit Institutions are revoked or amended insofar as they are contrary to the provisions of the present Decree-Law.
Art. 26. The present Decree-Law shall enter into force on the day of its promulgation.
The Office of Commissioner of Official Banks is abolished.
Until the nationalization of the official banks and the reorganization of the other official credit institutions, as referred to in the first and fourth paragraphs of Base 4 of Law No. 2 of April 14, 1962 on the Foundations for the Credit and Banking System, is accomplished, they shall continue to be governed by their present organs of direction and administration.
Thus I order by the present Decree-Law, done in Madrid on June 7, 1962.
The Decree-Law on Industrial and Investment Banks, 1962 1
Law No. 2 of April 14, 1962 on the Foundations of the Credit and Banking System orders in Base 6 the proclaiming of the legal status of industrial and investment banks whose primary function shall be to promote new industrial enterprises, thereby stimulating and revitalizing private initiative, and to cooperate in long-term financing.2
This is one of the most urgent tasks entrusted to the Government by that Law, since the establishment of new banks of this type will permit maximum use of the possibilities offered to the national economy by the savings available for investment.
In the provisions governing the regime of industrial and investment banks, the aim has been to make all the kinds of facilities required by banks of this type for the development of their promotion and financing activities compatible with the proper precautions which are also necessary to ensure their sound and safe expansion.
The aim has also been to avoid all unnecessary rigidity through the establishment of flexible formulas. In this connection, the limitation imposed by other legislation in respect of the period during which the banks may hold securities issued by the concerns in which they participate has been replaced by a system of indirect incentives for liquidation of such securities through the granting of fiscal benefits which decrease in proportion to the period during which such securities are held in the banks’ portfolios; this system, on the other hand, stimulates the creation of enterprises that show promise of becoming profitable in the shortest time, which are also those least likely to give rise to inflationary tendencies.
The obtaining of resources by the industrial and investment banks, aside from their own capital and reserves, is facilitated through the granting of tax and other privileges affecting the cash bonds and debentures issued by them, and this will provide for savings a new and interesting form of investment which was missing in our system.
Finally, transitional regulations are issued so that existing banks that wish to become industrial banks [sic] may adapt themselves to the new legal status.
Therefore, on the motion of the Council of Ministers at its meeting on November 9, 1962, using the authority given me by Article 13 of the Law of the Cortes, and having heard the Committee referred to in Article 10 of the Law on the Legal Regime of the State Administration, I order:
Art. 1. With effect from the publication of the present Decree-Law, the Minister of Finance, on the recommendation of the Bank of Spain and having heard the report of the High Banking Council, may authorize the establishment of new industrial and investment banks which will be governed by the regulations contained in the following Articles, and by those applicable to banks in general as far as they are not amended hereby, and they will also be governed by the general provisions governing joint-stock companies.
Art. 2. The new banks shall adopt the form of joint-stock companies.
Art. 3. Their capital stock shall not amount to less than one hundred million pesetas, fully paid up. All the shares representing the capital shall enjoy equal rights, and the founders are forbidden to reserve for themselves special remunerations or advantages of any kind.
Other banks may own a share in the capital of these financial institutions, provided that the total does not exceed fifty per cent.
Art. 4. Industrial and investment banks may accept demand and time deposits, and may issue cash bonds and debentures with maturities of more than two years which shall be negotiable on the official stock exchanges.
The issuing of cash bonds and debentures shall be subject to the approval of the Institute for Medium-Term and Long-Term Credit, the report of the Bank of Spain having been heard.
Industrial and investment banks shall not engage in commercial transactions except when dealing with concerns in which, in the opinion of the Minister of Finance, they have an important participation.
Demand or time deposits having a maturity of less than two years can only be invested in medium-term and long-term transactions if the liquidity requirements fixed by the Ministry of Finance have been complied with.
Art. 5. These banks shall not maintain more than three branches or agencies, and the head office or one of the branches must be located at a place where there is an official stock exchange in operation.
Art. 6. The special object of industrial and investment banks shall be the promotion of new industrial or agricultural undertakings and the medium-term and long-term financing of them.
For this purpose they may grant credits for up to three years without the authorization of the Institute for Medium-Term and Long-Term Credit.
Art. 7. The outside funds held by the banks created under the provisions of the present Decree-Law may be used only for the acquisition of shares or participation in industrial or agricultural enterprises at the time of their organization, or directly when a previously organized company enlarges its capital, but never at a price higher than the par value, if there is a subscription to new shares justified by the holding of old shares, and if there is an express prior authorization by the Ministry of Finance.
The maximum limit on industrial securities held in the portfolios of these banks shall not exceed the percentage fixed by the Minister of Finance with reference to their own resources and to the capital of the concerns in question. As long as the Minister of Finance does not instruct otherwise, these percentages shall be three times the amount of their own resources and one half of the capital of the concern in which they have a share; temporarily, however, and for reasons of national interest, industrial and investment banks may be authorized to hold a larger participation, but the period of time necessary to bring the holding down to the general limits in force must be fixed.
Industrial and investment banks shall not invest in, or extend credit to, any single enterprise for a total in excess of a certain percentage of their own total resources, to be fixed by the Minister of Finance. As long as the Minister of Finance does not instruct otherwise, the maximum percentage shall be ten.
Art. 8. The Minister of Finance, bearing in mind the characteristics and purposes of these banks, shall determine their cash, liquidity and guarantee ratios.
Art. 9. The value increases obtained by these banks when they sell industrial securities out of their portfolios shall be wholly exempt from the tax on corporate profits if the sale is made within four years from the purchase date; if the sale is made after four years, a reduction of seventy-five per cent will be granted instead of total exemption, provided that the sale is made within the fifth year, of fifty per cent if it is made in the sixth year and of twenty-five per cent within the seventh year, after the expiration of which no reduction will be made.
Art. 10. Fifty per cent of the value increases referred to in the preceding Article shall be placed in a special reserve fund which, like the other funds of this type, may not be distributed without the express authorization of the Minister of Finance, the report of the Bank of Spain having been heard.
Art. 11. The deposits received and the cash bonds and debentures issued by the banks referred to in this Decree-Law shall be exempt from tax on capital income, transfer tax, stamp duty and any tax on the issue or negotiation of bearer securities.
The Minister of Finance may extend to these bonds and debentures the other privileges and exemptions enjoyed by public funds.
Art. 12. The Minister of Finance, on the recommendation of the Bank of Spain, shall determine the interest rates and commissions applicable to the credits granted or received by the industrial and investment banks.
Art. 13. Industrial and investment banks shall have access to the rediscount facilities of the Bank of Spain, in accordance with the general norms applicable to banks and taking into special consideration their nature and the operations they engage in.
First. Banks already in operation may request from the Minister of Finance the classification of industrial and investment bank, which will be granted, in any case, once the transitional regulations to which they must submit in order to adjust themselves gradually to the legal status provided by this Decree-Law have been issued.
Second. The Minister of Finance shall issue any complementary regulations that may be necessary for the implementation of and better compliance with and execution of the provisions of this Decree-Law, which will be reported immediately to Parliament.
Third. The Minister of Finance shall exercise the powers conferred on him in connection with the industrial and investment banks after hearing the Bank of Spain, to whom he may delegate all or part of such powers.
Thus I order by the present Decree-Law, done in Madrid on November 29, 1962.
The Monetary Unit: A Note
The basic monetary unit of Spain is the peseta. Originally, it was represented by silver coin and was divided into four reales; subsequently, it was divided into 100 céntimos.
It appears that coins designated as pesetas were issued for the first time in 1772 by virtue of the Ordinance of Aranjuez. On Janaury 1, 1859 a peseta equal to 1 French franc or 4.5 grams of fine silver or 290.322 milligrams of fine gold was introduced as the monetary unit. During the years 1864-68 this peseta was replaced by the escudo, but it was reintroduced, at par with the French franc, on October 19, 1868. The silver content of the coins, whether of the denomination of 1 peseta or multiples or fractions thereof, has been changed from time to time. For detailed information on such changes in the period 1868-1951 and related changes in the foreign exchange rates in terms of pesetas during the same period, see René Sédillot, Toutes les monnaies du monde: Dictionnaire des changes (Paris, 1955), pp. 384-385.
Par Value. With effect from July 17, 1959, Spain agreed with the International Monetary Fund on an initial par value for the peseta of 0.0148112 gram of fine gold per peseta or 60 pesetas per U.S. dollar.
The Decree-Law on the Bretton Woods Agreements, 1958 1
The contribution which Spain can make to cooperation among the countries of the free world and the desirability of its progressive integration into various international organizations make it advisable for Spain to become a member of the International Monetary Fund and the International Bank for Reconstruction and Development, institutions that since their creation have been working actively for the expansion and stability of world trade and the economic development of their member countries, encouraging monetary cooperation for the establishment of a multilateral system of payments in international transactions.
Therefore, on the motion of the Council of Ministers, and using the authority given me by Article 13 of the Law of July 17, 1942 as amended by the Law of March 9, 1946, and having heard the Committee of the Cortes, in compliance with Article 10(3) of the Law on the Legal Regime of the State Administration, I order:
Art. 1. Approval shall be granted for the adherence by Spain to the Articles of Agreement of the International Monetary Fund and of the International Bank for Reconstruction and Development, which form Annexes A and B, respectively, to the Final Act of the United Nations Monetary and Financial Conference, held in Bretton Woods from July 1 to July 22, 1942. 2 A translation of the said Articles of Agreement is attached to the present Decree-Law.
Art. 2. By virtue of Resolution No. 13-5 of the Board of Governors of the International Monetary Fund and Resolution No. 122 of the Board of Governors of the International Bank for Reconstruction and Development, concerning the membership of Spain in those institutions, Spain has agreed with the International Monetary Fund to set a quota of one hundred million U.S. dollars, 3 and with the International Bank for Reconstruction and Development to subscribe to one thousand shares of the Bank’s capital having a nominal value of one hundred thousand U.S. dollars each. Spain’s subscription to the Fund shall be equal to its quota. The subscription to each of these institutions shall be paid in gold, U.S. dollars and pesetas, in the proportions determined by the said Resolutions on membership and by the pertinent provisions of the Articles of Agreement.
Art. 3. The Ministry of Finance shall be authorized to arrange with the Bank of Spain special non-interest-bearing credits to cover the portion of the subscriptions to the International Monetary Fund and the capital of the International Bank for Reconstruction and Development payable in pesetas, as well as the amounts to be paid in under the Articles of Agreement of the said organizations and the Resolutions of the Boards of Governors thereof concerning the membership of Spain. These credits shall not be computable for purposes of the limitation provided for in Article 22 of the Law of December 31, 1946 on the Banking System, in regard to advances from the Bank of Spain to the Treasury.
The Spanish Foreign Exchange Institute shall be authorized to allocate the gold or U.S. dollars necessary to meet payment of the above-mentioned subscriptions.
Art. 4. In conformity with Article XIII, Section 2, of the Articles of Agreement of the International Monetary Fund and Article XV, Section 11, of the Articles of Agreement of the International Bank for Reconstruction and Development, the Bank of Spain shall be designated as depository of the peseta funds held in favor of the said organizations. The Bank of Spain shall open in the name of the International Monetary Fund and of the International Bank for Reconstruction and Development the accounts in pesetas necessary to carry out their operations.
Furthermore, and for the purposes referred to in Article V, Section 1, of the Fund Agreement and in Article III, Section 2, of the Bank Agreement, the Spanish Foreign Exchange Institute shall be designated as the official organization through which the Spanish Government shall deal with the said international organizations.
Art. 5. The Minister of Finance shall be authorized to sign and issue promissory notes or other similar obligations, non-interest-bearing, nonnegotiable and payable at par on demand, in place of the payments to be made in pesetas in favor of the International Monetary Fund in conformity with Article III, Section 5, of the Fund Agreement, and in favor of the International Bank for Reconstruction and Development in accordance with Article V, Section 12, of the Bank Agreement.
Art. 6. The International Monetary Fund and the International Bank for Reconstruction and Development shall enjoy, in the territories referred to in Article 8 of this Decree-Law, the status, immunities and privileges recognized in Article IX of the Fund Agreement and Article VII of the Bank Agreement.
Art. 7. The Council of Ministers, on the proposal of the Minister of Commerce, shall determine the par value of the peseta on the terms provided for in the Articles of Agreement of the International Monetary Fund and in Resolution 13-5 of the Board of Governors of the Fund.
Art. 8. The two Agreements referred to in Article 1 of this Decree-Law and published as Annexes thereto shall have the force of law in Spain and in the cities and provinces under Spanish sovereignty in Africa. The said Agreements shall enter into force on the day they are signed and when they have been formally accepted in the name of the Spanish Government.4
Art. 9. The Minister of Foreign Affairs, the Minister of Finance and the Minister of Commerce shall be authorized to issue such regulations as may be necessary for the execution of the provisions of this Decree-Law.
The Minister of Foreign Affairs shall be authorized to issue and sign the full powers and instruments of acceptance in relation to the adherence of Spain to the Articles of Agreement of the International Monetary Fund and of the International Bank for Reconstruction and Development.
Art. 10. All legal provisions shall be revoked that are contrary to the present Decree-Law, which shall enter into force on the day it is published in the Boletín Oficial del Estado5 and which shall be reported immediately to the Cortes.
Thus I order by the present Decree-Law, done in Madrid on July 4, 1958.
Decreto-Ley 18/1962, de 7 de junio, de nacionalizatión y reorganización del Banco de España (Decree-Law No. 18 of June 7, 1962 on the Nationalization and Reorganization of the Bank of Spain). The Law was published in the Boletín Oficial del Estado of June 13, 1962 and therefore entered into force on that date.
The text of Law No. 2 of April 14, 1962 is given below, pp. 622-634.
The High Banking Council was established by virtue of Art. 50 of the Law of December 31, 1946 on the Banking System. As of September 1, 1966 it was composed as follows: the Undersecretary of the Treasury and Public Expenditures (chairman); one Deputy Governor of the Bank of Spain; and five representatives nominated by the national banks, three by the regional banks, two by the local banks, and two by organizations of banking employees. Foreign banks must also be represented, but may not vote.
The Minister is also responsible for determining minimum and maximum interest rates in respect of all banking transactions by virtue of Law No. 13 of March 18, 1966, the text of which follows:
“Article 43 of the Law of December 31, 1946 on the Banking System empowers the Minister of Finance, on a prior report from the High Banking Council, to set forth the maximum interest rate payable on current accounts, deposits and other similar operations, and likewise to establish the minimum rates of interest and commissions on credit operations and the conditions for their application; the intention in doing this was above all to regulate competition between the various banks by setting limits within which this competition should have play. However, it is opportune to use the establishment of interest rates not only in this limited sense, as a regulator of healthy competition, but in the service of monetary policy, in which the delimitation of such rates constitutes a fundamental instrument. For this, it is essential that it be possible to determine not only the minimum, but also the maximum, amount of the interest and commissions on credit operations, so that, without detriment to its flexibility, and within the assigned limits, the banking system as a whole may serve the purposes that monetary policy may require at any time.
“In view of the above, and in accordance with the draft prepared by the Spanish Cortes,
“Sole Article. Article 43 of the Law of December 31, 1946 on the Banking System shall be replaced by the following:
‘Art. 43. It shall be the responsibility of the Minister of Finance, on a prior report from the Bank of Spain and from the High Banking Council:
‘(A) To set forth the maximum interest rate payable on current accounts, deposits and other similar operations.
‘(B) To establish the maximum and minimum rates of interest and commissions for credit operations and the conditions of their application. In every case, the difference between the two interest rates must be determined in relation to the cost of money. However, variations may be authorized in the rates and conditions in specific localities or for certain sectors or activities of the national economy when special circumstances make it advisable.
‘A prior report shall be required from the Syndical Organization and from the National Economic Council for the matters to which Paragraphs (A) and (B), above, refer.
‘(C) To determine the style in which the balance sheets and extracts from the profit and loss accounts of the banks and bankers operating in Spain are to be drawn up and published.
‘(D) To formulate general rules of an obligatory nature concerning the distribution of the banks’ dividends.
‘(E) To make provision for the creation of clearinghouses.’
“Done at the Palace of El Pardo on March 18, 1966.
New general By-Laws had not yet been issued at the time this material on Spain was being prepared for publication.
See below, pp. 633-634.
June 13, 1962.
Ley de 17 de julio de 1942 de creación de las Cortes Españiolas.
Ley 2/1962, de 14 de abril, sobre bases de ordenación del Crédito y de la Banca (Law No. 2 of April 14, 1962 on the Foundations for the Credit and Banking System). The Law was published in the Boletín Oficial del Estado of April 16, 1962.
In addition to the principal laws, decrees, and implementing order concerning the banking system that are published here, numerous other measures related to the 1962 reform of the central bank and banking regime have been issued; for the text of these in Spanish, see Consejo Superior Bancario, Leyes y disposiciones sobre la reforma bancaria en España (Madrid, 1965).
It is noteworthy that the Law of December 31, 1946 on the Banking System has not been expressly repealed; certain of its provisions, for example, Art. 43, are still controlling (see footnote to Art. 10(c) of the Bank of Spain Law, 1962, above). However, by virtue of the second of the Final Provisions of the Bank of Spain Law, 1962, individual provisions of the 1946 Law have been revoked insofar as they are contrary to the provisions of the 1962 Law.
See Decree No. 1312 of June 5, 1963, below, pp. 634-638.
See Decree-Law No. 19 of June 7, 1962, below, pp. 644-651.
See also the footnote to Article 10(c) of the Bank of Spain Law, 1962, above.
Specific rules governing “disqualifications” are provided for in Decree No. 1467 of June 22, 1962 (published in the Boletín Oficial del Estado of July 4, 1962).
For the text of the law creating this Institute, see below, pp. 644-651.
On the legal status of industrial and investment banks, see, in general, Decree-Law No. 53 of November 29, 1962, and especially Arts. 4 and 6 (p. 653, below).
For the text of Decree No. 1312 of June 5, 1963 on the modification of the banking status quo, and of the Order of November 30, 1963 implementing that Decree, see below, pp. 634-638 and 639-643
Decreto 1312/1963, de 5 de junio, sobre modification del “statu quo” bancario (Decree No. 1312 of June 5, 1963 on Modification of the Banking Status Quo). The Decree was published in the Boletín Oficial del Estado of June 8, 1963.
Orden de 30 de noviembre de 1963 desarrollando el Decreto 1312/1963 de 5 de junio, sobre modification del “statu quo” bancario (Order of November 30, 1963 Implementing Decree No. 1312 of June 5, 1963 on Modification of the Banking Status Quo). The Order was issued by the Minister of Finance and was published in the Boletín Oficial del Estado of December 21, 1963.
For the text of Decree No. 1312 of June 5, 1963, see above, pp. 634-638.
For the text of Decree-Law No. 56 of December 6, 1962 on Portfolios and Ratios of Private Banks, see the Boletín Oficial del Estado of December 7, 1962 and Consejo Superior Bancario, Leyes y disposiciones sobre la reforma bancaria en España (Madrid, 1965), pp. 43-45.
For determination of the expansion capacity of the banks, see the first paragraph of Clause 4, above.
Decreto-Ley 19/1962, de 7 de junio, sobre creación del Instituto de Crédito a medio y largo plazo (Decree-Law No. 19 of June 7, 1962 on Création of the Institute for Medium-Term and Long-Term Credit). The Decree-Law was published in the Boletín Oficial del Estado of June 13, 1962.
That is, as provided in the first and fourth paragraphs of Base 4 of Law No. 2 of April 14, 1962; see above, pp. 630-631.
Decreto-Ley 53/1962, de 29 noviembre, sobre Bancos industriales y de negocios (Decree-Law No. 53 of November 29, 1962 on Industrial and Investment Banks). The Decree-Law was published in the Boletín Oficial del Estado of November 30, 1962.
Decreto-Ley de 4 de julio de 1958 por el que España se adhiere a los Convenios Constitutivos del Fondo Monetario Internacional y del Banco Internacional de Reconstructión y Fomento (Decree-Law of July 4, 1958 Whereby Spain Adheres to the Articles of Agreement of the International Monetary Fund and of the International Bank for Reconstruction and Development). The Decree-Law was published in the Boletín Oficial del Estado of July 10, 1958 and therefore entered into force on that date. An error in Art. 6 was corrected in the Boletín of July 15, 1958.
Error in Spanish text: 1942 should read 1944.
This quota was increased to US$150 million with effect from July 23, 1960, and to US$250 million with effect from March 25, 1966 (pursuant to Resolutions of the Board of Governors of the Fund Nos. 14—1 and 20–7, respectively).
September 15, 1958.
July 10, 1958.
PUBLICATIONS OF THE BANK OF SPAIN
Memoria (annual 1962—). For the period prior to the nationalization of the Bank of Spain in 1962 see Memoria (1890–1961).
PUBLICATIONS RELATING TO BANKING AND CENTRAL BANKING
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Prados ArrarteJesúsEl sistema bancario español: con especial consideratión del ingreso de España en la cooperatión económica europea (Madrid1958).
“La Banque en Espagne”Revue du Marché Commun (Paris) May1964supplement to no. 69 pp. 161–233.
ClaytonG. “Spain,” inR. S.Sayersed.Banking in Western Europe (Oxford1962) pp. 347-382.
Consejo Superior BancarioLeyes y disposiciones sobre la reforma bancaria en España (Madrid1965). A collection of consolidated versions of laws concerning banking central banking and related matters.
Facultad de Derecho de MadridLa estabilización en España: conferencias pronunciadas en el Banco de España (Madrid 1960). Includes Luis Olariaga “La política de crédito en la estabilización española,” pp. 1–25; Juan Sarda Dexeus “Aspectos monetarios de la estabilización,” pp. 27–45; Jesús Prados Arrarte “La política comercial en la estabilización,” pp. 47–65; Mariano Sebastián “La política presupuestaria en la estabilización,” pp. 67–84; Julio Tejero “Mercado de capitales y estabilización,” pp. 85–104; José María Naharro “Las inversiones de capital extranjero y la estabilización,” pp. 105–125; Juan José Rovira “La ayuda económica americana a España,” pp. 127–157; Gonzalo Perez de Armiñan “Financiación internacional y estabilización,” pp. 159–180.
International Bank for Reconstruction and DevelopmentThe Economic Development of Spain: Report of a Mission (Baltimore1963).
Legislatión económica: III. Ordenación bancaria ([Madrid] 1965). A collection of consolidated versions of laws concerning banking central banking and related matters.
Vilaseca MarcetJosé MaríaLa banca central y el estado (Barcelona1947).
MorenoAndrés “The Spanish Capital Market,” in The Post War Functioning of Banking: Return to Normal? Lectures delivered at the Seventh International Banking Summer SchoolSeptember1954 (Madrid ) pp. 213–229.
RidruejoEpifanio “The Spanish Banking System,” in The Post War Functioning of Banking: Return to Normal? Lectures delivered at the Seventh International Banking Summer SchoolSeptember1954 (Madrid ) pp. 141–212.
Sáez de IbarraL. “Regulations of Spanish Banking,” in The Post War Functioning of Banking: Return to Normal? Lectures delivered at the Seventh International Banking Summer SchoolSeptember1954 (Madrid ) pp. 89–109.
Bills of Exchange and Check Law
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Código de commercio (Commercial Code)1888: Titulo X Del contrato y letras de cambio (On bills of exchange and the relating contract) Arts. 443-530; Titulo XI Sectión Segunda De los mandatos de pago llamados checques (On money orders called checks) Arts. 534–543.
See also section entitled “Spanien” in Schettler and Büeler Das Wechsel- und Scheckrecht aller Länder (Cologne1957—loose-leaf) for the text in Spanish and German of the above-cited provisions of the Commercial Code and of related measures.
Código de commercio (Commercial Code)1888.
Ley de 17 de julio de1951: Normas reguladoras de sociedades anónimas (Norms Governing Joint-Stock Companies).
Ley de 17 de julio de1953: Régimen juridico de Sociedades de responsabilidad limitada (Legal Regime of Limited Liability Companies).