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April 6, 2022

Spain proposes new entity to regulate financial services industry

The Spanish government is working to establish a new authority to ensure banks and other financial entities fulfil their obligations toward customers, Reuters has reported.

The move is in response to customers’ complaints regarding mortgage lending and financial exclusion.

The shift towards digital banking had not been easy for a portion of the population to adapt to, leaving them more exposed to financial exclusion, especially the elderly.

“[Financial services] is the area with the highest number of complaints from citizens, and one that has a very high degree of litigation,” Spain Economy Minister Nadia Calvino noted.

The new entity will perform roles previously performed by the Bank of Spain, Spain’s National Securities Market Commission (CNMV) and the Directorate-General for Insurance and Pension Funds.

It will be responsible for regulating financial institutions, payment firms, investment companies and fintech or digital asset providers.

Spain has set out the authority’s creation in a draft bill, but no timetable is set for establishing it.

The new authority will operate under the country’s finance ministry and offer its services for free to customers.

It will be funded by the fee imposed on the entities it regulates for each accepted case.

Separately, the government’s rescue fund FROB has increased its stake in Sareb, a ‘bad bank’ established to take bad loans from other banks.

FROB now owns a 50.14% stake in Sareb, which still holds €34.5bn in senior debt.

Notably, Spanish banking majors Santander and Caixabank also own 22.2% and 12.2% stakes in the Sareb respectively.

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