Government reform Banking Act - 09.07.2010

The Prime Minister, José Luis Rodríguez Zapatero, has announced that today (Friday) the Council of Ministers will adopt a decree-law to reform the law of the savings banks.

After receiving in La Moncloa Executive Committee of the Spanish Confederation of Savings Banks (CECA), the Prime Minister has appeared before the media to report the terms of this reform.
Rodriguez Zapatero has called this legal modification of "critical, urgent and necessary" and asserted that "the most important in the history of the Spanish banking system."
He explained that the commitment to carry out the reform was included in the Strategy of Sustainable Economy and is the result of dialogue between the Government and the main opposition party, as announced on May 5th, after the meeting had with Mariano Rajoy.
 
Strengthening the financial sector
 
This Decree Law contributes primarily to strengthen the financial sector in our country and therefore our economy and stability, said Zapatero.
The reason for its passage as legislation was because the Executive believes that reform is urgent and that this is the "right time" to carry it into effect once it has completed the restructuring of the Savings Banks.
Despite the severe financial and economic crisis, our financial system has shown strength, but also some weaknesses have surfaced in the savings banks that must be strengthened for future stability, adds the President.
Objectives
The legislative changes will preserve the social and general interests of the Banks and their foundational work, said the President.  It has two main objectives: capitalizing on housing, facilitating their access to resources of the highest category in the same conditions as other credit institutions, and democratization and professionalisation of their government.
Regarding capitalisation, reforming the system of participatory assessments to facilitate access by private investors, are recognized political rights to members in proportion to the percentage of their stake in the assets of the Fund, the institutions may not issue more 50% of its assets to avoid distortion and abolishing the limits on the holding of shares by a single participant.
With regard to the professionalisation of its governing bodies, the Decree Law establishes the incompatibility of the elected officials to be members of the governing bodies of the institutions and prevents the participation of representatives of the Executive Administration.
The Government has said the President, claims that this reform, "far-reaching", get a broad parliamentary support and autonomous communities, because their content is the result largely of a dialogue with the People's Party with the savings banks.  Besides, he added, will deepen this dialogue with the Autonomous Communities and with representatives of trade unions.