Governance Structure of the BDE and the European Central Banking System

BDE Configuration and Governing Bodies

Governing Bodies of the BDE

The governing bodies of the Bank of Spain (BDE) are:

• The Governor: Appointed by the King at the proposal of the Government. The term is six years, non-renewable.
• The Deputy Governor: Appointed by the Government upon the proposal of the Governor. The term of office is also six years, non-renewable.
• The Board of Governors: Comprises the Governor, the Deputy Governor, six Directors appointed by the Government, the Director General of the Treasury and Financial Policy, and the Vice President of the CNMV.
• The Executive Committee: Composed of the Governor, the Deputy Governor, and two Directors.

The European System of Central Banks (ESCB)

The ESCB comprises the European Central Bank (ECB) and the central banks of all countries of the European Union (EU), including those from countries outside the Economic and Monetary Union (EMU).

The ECB utilizes the national central banks to carry out operations corresponding to the ESCB. The degree of participation of each national central bank in the tasks of the system depends mainly on its status of full membership in the EMU.

Governing Bodies of the ESCB

• The Executive Board: This body is responsible for the daily management of the ECB, particularly the implementation of monetary policy, following the guidelines established by the Governing Council. It consists of a Chairman, a Vice Chairman, and four members.
• The Governing Council: This council adopts the decisions necessary for the ESCB to perform its functions. It designs and formulates monetary policy and establishes the necessary guidelines for its implementation. Configured as the highest governing body of the ECB, its decisions set out the guidelines to be followed by the Executive Board. The Governing Council is composed of the members of the Executive Board (whose Chairman and Vice Chairman are common to both bodies) and the governors of the central banks of countries belonging to the EMU.
• The General Council: Comprises the President and Vice President of the ECB and the governors of central banks of all EU countries. The functions of the General Council are transient in nature because it addresses issues related to countries temporarily exempted from the EMU.

Decision Making and Central Bank Independence

Each member of these bodies has one vote for decision making, which in most cases is adopted by a simple majority. The ECB and the ESCB are entirely independent of national and European political powers in the exercise of monetary policy. This complete freedom in making monetary policy decisions means the ESCB may potentially adopt measures that go against the economic policy of the EU or any of its member countries.