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Bank of Spain

By Matthew Leake

Bank of SpainSpanish banking systems are considered among some of the best in Europe due to their profitability and higher than average operating income. Spain’s national bank is called the Banco de Españaor Bank of Spain. It is the centre of Spanish banking and was established in Madrid in 1782 by King Charles III, who then named it the Banco Nacional de San Carlos.

Throughout the 1800s, the Spanish bank grew and began spreading its operations nationwide, seeing off competition from other institutions that had been established in Madrid and Barcelona. Eventually it cemented its position as the Spanish central bank. It was renamed Banco de España in 1856 and in 1891 moved to its current home among the grand surroundings of the Plaza Cibeles in central Madrid.

The Bank of Spain has a number of roles. First and foremost, it implements the monetary policy set by Spain’s Ministry for Economy and Finance overseeing all Spanish banks to make sure they deal fairly and adhere to the banking laws set by the government.

In addition to carrying out its own government’s fiscal policy, the Bank of Spain also defines and implements the Eurosystem’s policy which monitors price stability within the Eurozone. Spain was one of the eleven original Eurozone countries that adopted the Euro after making the Peseta obsolete in February 2002. The Bank of Spain is therefore in charge of issuing legal tender Euros throughout the country and also looks after Spain’s gold reserves, which were some of the biggest in the world before the Spanish Civil War.

Spanish Banking System

There are two main types of banks in Spain, commercial banks known simply as “Bancos”, and “Cajas de ahorros”, which are Spanish savings banks. Whilst branches for larger commercial banks can be found nationwide, savings banks tend to be more regionally focussed. As in other countries, a current account with a commercial bank will yield little if any interest but allow easier access to your money whereas a savings bank account provides much better interest rates but with the downside of having more restricted access.

For foreigners wishing to open a bank account in Spain, they must provide sufficient identification, such as a passport or driving license, from their home country as well as a confirmation of address. Moreover, non-Spaniards need to have a foreign identification number called a NIE (Número de Identificación de Extranjeros), obtained from a local police station. Provided you have all these documents with you, you should be able to go into any high street bank branch in Spain and open an account straight away.

Santander is the largest banking group in Spain with the most significant international presence. Following its extensive growth in recent years and acquisition of several domestic banks outside of Spain, it is now considered to be one of the most solid banks in the world and oversees a huge amount of assets. As of 1994, any EU registered bank has been allowed to open in Spain in order to create more competition and freedom for businesses. This means that alongside Santander and the numerous other Spanish banks, it is not uncommon to see branches of Barclays or Deutsche Bank taking advantage of the European Union banking laws.



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