The headquarters of the Bank of Spain in the Cibeles square in the centre of Madrid. (Efe)
The Spanish central bank is experiencing an escape by its most valuable assets, its servants, which has accelerated over the last weeks. More than 20 have left since the beginning of the year, which is about 10 percent of the total number of servants. About 15 have moved to other public organizations and the others to private entities or consultants.
These exits take place because, on the one hand, there is a growing interest among these entities to be able to count on their expertise in these times of changes and with the upcoming rescue of the banking sector. On the other hand, there is a feeling of mistreatment, both economic and professional, among servants that makes them leave.
Among central bank servants, it is relatively common to go over to the ‘enemy’s side,’ not the least as it multiplies their salaries several times. They usually ask for a few years of extended leave of absence, thus keeping the position in case the new experience does not turn out as good as expected. There are no strict rules regarding these extended leaves and it is the very Bank of Spain that approves or denies them.
New rules and regulations
The current interest on behalf of banks to hire central bank servants to their internal management branches is explained by the large amount of new rules and regulations that the entities will have to comply with.
They include the two financial reforms pushed forward by Finance Minister Luis de Guindos this spring, which changed rules related to real estate provisions, as well as the new reform that will be approved this Friday, including changes related to the conditions set in the Memorandum of Understanding with Brussels over the rescue and the creation of a ‘bad bank,’ among other issues.
Also, they will have to adjust to major changes related to the rescue plan for the whole Spanish banking sector, and many questions still remain unanswered, such as, who will receive public funds, under which conditions, and who will, instead, have to look for financing on the markets.
Expertise and better communication
With these newly hired professionals, the entities want to be able to count on their expertise and, at the same time, achieve a more smooth dialogue with their former colleagues when it comes to the implementation of the new regulations and to negotiate various aspects that are still open and could be interpreted in various ways.
According to sources close to the situation, four persons have left the central bank for BBVA, Boston Consulting, KPMG and PriceWaterhouseCoopers. As can be seen, there is interest to hire these servants also among the consultants that are actively participating in the on-going evaluation of the Spanish banking sector and who expect to continue assessing these entities in the future.
The number of servants who turn to other public organizations also draws attention. For instance, some have moved to the SEPI (Sociedad Estatal de Participaciones Industriales), the FROB (the state-backed bank bailout fund), the ICO (Instituto de Crédito Oficial), the Ministry for Economy, and so on.
According to the mentioned sources, this is because the public servant career is a “dead road” – in Spain public servants are hired for life, but there is criticism that this leads to little flexibility for them to advance in their careers – and the professionals prefer to take advantage of the opportunities in other public administration areas where there are more development possibilities.
This article was translated and edited by Stina Lunden.
A longer version is available in Spanish here.
MORE IN ECONOMY & BUSINESS
CRISIS IN SPAIN’S INDUSTRIAL SECTOR
Carlos Sánchez (06:00).- The statistics give a clear picture: these are bad times for Spain’s industrial sector and things are not getting better. The figures don’t reflect the prevailing economic situation at a specific time and aren’t exclusively...
THE GOVERNMENT PUTS PRESSURE ON MAJOR BANKS
E. S. / M. L. (06:00).- From the Moncloa, the headquarter of the Spanish government, pressure is increasing on the major Spanish banks, following their initial rejection, to participate with capital in the ‘bad bank,’ according to sources close to the...
PARADOXICAL RESULT OF FISCAL AMNESTY
Eduardo Segovia (06:00).- The fiscal amnesty launched by the Spanish government in order to regulate capital gains hidden from the tax authorities will have a paradoxical result. It will be successful when it comes to the capital that will be regulated, but it will bring...