The independence of the Banco de España’s senior management in relation to the political authorities and to influence from the sector supervised is reinforced, inter alia, by: i) a specific selection procedure for the posts of Governor, Deputy Governor and Council members, with the Governor’s appointment being made at the proposal of the Prime Minister, from among persons with recognised competence in monetary or banking matters and a prior appearance by the Minister for the Economy being required before the competent Parliamentary Committee to report on the candidate;4 ii) the terms of office of the Governor and the Deputy Governor are for six years (exceeding the electoral cycle) and are non-renewable; iii) the setting of specified causes for dismissal from the posts of Governor, Deputy Governor and elected Council members;5 iv) the incompatibilities rules to which the Governor, the Deputy Governor and the Council members are subject; v) the specific conflict of interest rules applicable during their terms of office that include restrictions on financial transactions and private investments; and vi) prohibition of pursuit of professional activity relating to credit institutions or to securities markets in the two years following stand-down from the post (see Annex 3). As regards the staffing of the institution, the Banco de España, by legal imperative, recruits its employees observing the principles of equality, merit, ability and openness. These principles prevail throughout their career within the institution. Job security for Banco de España employees rests on the protection afforded by labour market legislation, strengthened by various in-house policies (e.g.

Since then, a comprehensive regulatory reform package was developed – which in large part has now been implemented – to reduce the likelihood that such a crisis could happen again. 1 Brazier, A., (2016), ‘A macroprudential approach to bank capital: Serving the real economy in good times and bad’, speech available at https://www.bankofengland.co.uk/speech/2016/a-macroprudential-approach-to-bank-capital-serving-the-real-economy-in-good-timesand-bad. 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  In 2010 the Government established the Independent Commission on Banking (ICB) to make recommendations to improve financial stability and competition in the banking sector. The ICB recommended that the core retail banking operations of UK banking groups should be ring-fenced from any international or investment banking activity in their groups. The ICB argued that if retail banking operations had been ring-fenced prior to the crisis, this would have reduced the likelihood that the banks would have needed Government support. The ICB’s recommendations formed the basis of the banking reform legislation passed by Parliament in 2013. This set out the core banking activities which must sit in a ring-fenced bank, as well as the ‘prohibited’ activities that must be separated from the ring-fenced bank or stopped altogether. The legislation also specified the degree of separation required. Ring-fenced banks must have the capability to make decisions independently of their groups and should not be operationally dependent on group entities which undertake prohibited activities. Ring-fenced banks must also have sufficient financial independence and have their own capital and liquid resources.