The Council of Ministers approved the Royal Decree Law on the reorganisation of the financial system, which tackles four areas: a reorganisation plan of the sector, a restructuring plan, the simplification of governing bodies of savings banks and strict limitations on the remuneration of directors and executives of those entities that receive subsidies.
The reform was presented on Thursday by the Minister for Economic Affairs and Competition, Luis de Guindos, who together with the Vice-President of the Government, Soraya Sáenz de Santamaría, provided further details at the press briefing following the Council of Ministers.
The Vice-President explained that the Government's intention is to "simplify the structure of those savings banks that do not carry on activities of a credit entity". The intention is to reduce costs and establish the obligation that "90% of their available surplus is earmarked for social works", she stated.
The Government also established a series of limitations on the fixed and variable remuneration of directors, senior managers and executives of both those entities that received subsidies and those four in which intervention actually proved to be necessary.
Luis de Guindos specified that the senior managers of those entities that have received loans from the Fund for Ordered Bank Restructuring (Spanish acronym: FROB) cannot receive annual remuneration in excess of 600,000 euros. The limit for senior managers at those entities intervened has been set at 300,000 euros.
Soraya Sáenz de Santamaría underlined that, since they are entities operating with public aid, "the Government considers that it can establish limits on this type of remuneration", in the just same way as limits are set in those cases in which the public sector carries on an activity.
Along the same lines, Luis de Guindos insisted that it is not the Government's intention "to set salaries in the private sector" but rather that public aid is destined for the purposes for which it is granted.
The Vice-President of the Government highlighted that the objective of the decisions adopted is to strengthen confidence and standing in Spanish society, in the economy and in the banking sector both at a national level and at an international level. It also seeks to reduce property valuations and adjust them to the current market reality.