The Government forms have a dual aim: i) the capitalization of savings banks. Their access to the highest category of resources under the same terms as other credit entities; and ii) the professionalization of their governing bodies.
In view of the main objectives of the Royal Decree-Law reform, they firstly strengthened the possibility of the savings banks attaining resources by allowing the issuance of shares (similar to bank stock). After the reform of the current economic rights of the shareholders, they have political rights to the assets in direct proportion with their percentage share, with a maximum limit of 50% of the aforementioned assets.
Secondly, the Royal Decree-Law reinforces the concept of commercial and professional integrity by excluding those who, amongst other offences, had criminal records for fraud or were banned from holding public posts or managing financial entities.
Likewise, representation by the Public Administration is limited to 40% (from the previous 50%) and, furthermore, it is now a requirement that any participation by the Autonomous Regions in the governing bodies be carried out by designated members of the legislative Chamber who have a prestigious and professional record.
In addition to the aforementioned aims, the Royal Decree-Law makes adjustments meant to strengthen the institutional protection systems (hereinafter “IPS”), which is a procedure used to group credit entities and savings banks (also called “cold mergers”).
On the other hand, the reform introduces alternatives for strengthening savings banks by allowing the undertaking of all the savings bank’s financial activities through a bank controlled by the savings bank and which holds less than 50% of its capital. A second option allows the savings bank to convert to a special type of foundation which conserves its social work but transfers all its financial business to a bank.
Finally, a reform of the tax system is foreseen in order to guarantee the fiscal neutrality of the different models along with a series of additional solvency measures to strengthen the components of the Spanish financial sector.
For further information, please contact Enrique Marinel-lo: [email protected]