Safeguards for a success story
Juan Ramón Quintás, Chairman of the Spanish Savings Banks Confederation (CECA), talks to Euromoney's Jules Stewart about the effects of the new finance law on the cajas
What is the government aiming to achieve with the new legislation on the cajas? Spain's cajas have been around for nearly 170 years but it wasn't until 1977 that they were allowed to compete on an even footing with commercial banks. In the past 25 years they have been steadily gaining market share, while at the same time their presence in the market has prevented the country's financial system from becoming a monopoly under the two big banks, SCH and BBVA, that dominate the financial services market.
The new law represents a major step forward in making the cajas more market oriented and competitive. One of the most significant initiatives is to limit the presence of public officials on the boards of the cajas. The last law that was introduced on the cajas in 1985 made it possible for political representatives to sit on the boards, but in many cases they accounted for 50% or more of the board members. The new law sets a 50% limit, directly or indirectly, and this safeguards the cajas' status as private foundations. Moreover, board members cannot be removed by local governments, and they are limited to serving a maximum of two four-year terms of office.