The Bank of Spain published on Friday a series of proposals to strengthen the independence of the institution following the reputational crisis experienced two years ago when a minister was appointed as the bank's governor, José Luis Escrivá.
After a long reflection led by the councillor Lucía Rodríguez, the institution proposes to the legislator to extend the duration of the governor's term from the current six years to eight, as is the case in the European Central Bank or the Bank of England. The proposal also calls for maintaining the current prohibition on the renewal of the position.
Specifically, the proposal states: "Regarding the duration and staggering of the terms, the report highlights that the current framework is relatively homogeneous and offers a lower degree of continuity than that observed in many comparable central banks. From the perspective of independence and institutional stability, it raises whether it might be advisable to extend the theoretical maximum term of the members of the governing bodies. For example, concerning the person holding the position of governor, it could be proposed to evolve to an eight-year model without the possibility of renewal, in line with the European Central Bank.
Furthermore, the report highlights the interest in introducing staggering mechanisms in appointments, in order to avoid excessively concentrated renewals, preserve continuity in the functioning of the collegiate bodies, and reinforce both the independence and the plurality of sensitivities within them. Staggering can be a valuable tool not only from an organisational perspective but also from the viewpoint of institutional balance.
You can consult the full report here.
