regarding leave of absence or the establishment or extension of periods of leave). Lastly, financial independence means that an independent institution has sufficient financial resources to equip itself with material and human resources for the pursuit of its mission. In this respect, the Banco de España has sufficient financial capacity as a result of the revenue sources legally and statutorily assigned to it, and it is able to draw on such revenue to cover its functioning costs. The difference between each year’s revenue and costs is made over to the Public Treasury, bolstering State revenues. Accordingly, the Banco de España uses the resources available to it observing the principles of efficiency and effectiveness that should govern the use of all public funds. I believe the Banco de España’s legal framework and experience as a financially and organisationally independent institution can be a good benchmark for any future redesign of other economic supervisors in Spain which, in some cases, enjoy less autonomy. 4  Article 24 of the Law of Autonomy provides that the Governor of the Banco de España shall be appointed by the King following a proposal by the Prime Minister. Nominees must be Spanish and must have recognised competence in monetary or banking matters. Prior to the appointment of the Governor, the Minister for Economy and Finance shall appear before the relevant parliamentary committee under the terms envisaged in Article 203 of the Spanish Parliamentary Internal Regulations, to report on the proposed candidate.

It has also been entrusted with other basic functions, such as conducting foreign-exchange operations consistent with the exchange rate policy established, holding and managing the official foreign-exchange reserves of the Member States, and promoting the smooth operation of payment systems. Since 2014, under Article 127(6) of the TFEU and Council Regulation (EU) No 1024/2013 (the “SSM regulation”), the ECB is responsible for specific tasks relating to the prudential supervision of banks located in the participating Member States. The ECB performs these functions within the framework of a Single Supervisory Mechanism made up of the ECB and the national competent authorities, as explained in Part 2 of this Annex. Finally, the ECB has the exclusive right to authorise the issue of banknotes in the euro area, to compile and produce statistics in collaboration with the NCBs in the performance of their functions, and to issue reports on consultations on legislative initiatives of the EU or of the national authorities concerning its sphere of competence. The organisation of the Eurosystem is based on the principle of decentralisation. Decision-making is centralised, while the implementation of decisions is decentralised. In practice, the NCBs perform almost all operational tasks of the Eurosystem: they conduct the monetary policy operations and, as agents of the ECB, manage its foreign reserve holdings, provide payment and securities settlement facilities and ensure the manufacture, issue and post-issue handling of euro banknotes. They also collect statistics for the ECB, collaborate with the ECB on translation and the production of publications and contribute to economic analysis and research.