Banks, saving banks and credit unions

These what are termed credit institutions.

What do these institutions do?

Their main activity consists of receiving money from the public and using it to grant loans and perform other similar banking operations. What sets them apart from other types of institutions is that only they are permitted by law to receive funds (with the exception of stock market issues or market instruments). These institutions are authorised to perform almost every type of financial operation, except for insurance, although they can market insurance products.

How are these institutions created?

Credit institutions need authorisation before they can receive funds from the public. Since 1 November 2014 granting authorisation has been the responsibility of the European Central Bank, while all the information required is collected and provided by the Banco de España. The authorisation process considers the following points:

  • The solvency of the new institution
  • The suitability of its shareholders and senior officers, their professional standing and the existence of a sound administrative and accounting organisation.
  • Adequate internal oversight procedures.
  • In the case of savings banks and certain credit cooperatives, the authorisation is granted by the  corresponding regional authorities, following a report from the Banco de España

Once authorised, the institutions must register their directors, managing directors and similar officers in the Register of Senior Officers (Registro de Altos Cargos) and register themselves in the Credit Institutions Register (in Spanish)Abre en ventana nueva (Registro de Entidades), both Banco de España’s registries.

The European Community legislation that regulates banking activities embodies the principles of a single licence and supervision by the country of origin, so every credit institution authorised in a European Union member state has what is called a “community passport”. However, credit institutions from other Member States wanting to operate in Spain, either through a branch or otherwise, must also be registered in Banco de España’s Credit Institution Register.

How are these institutions supervised?

To ensure their solvency and stability, these institutions are supervised by the European Central Bank´s Single Supervisory Mechanism (SSM)Abre en ventana nuevain the case of institutions deemed significantAbre en ventana nueva, referring to their importance and size, and by Banco de España in that of less significant institutions.

Banco de España is in charge of supervising the market conduct, oversight  of relationships with customers, and transparency regulations.

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