Spain Races Against Time to Appoint New Bank Governor Before ECB Decision

The Spanish government is in discussions with the main opposition party to appoint a new Bank of Spain governor before the European Central Bank's next interest rate decision on July 18. Current Deputy Governor Margarita Delgado is leading on an interim basis. Candidates include Soledad Nunez and Montserrat Martinez.

The Spanish government is in talks with the main opposition party to appoint a new Bank of Spain governor in time for the European Central Bank's next interest rate decision on July 18, Economy Minister Carlos Cuerpo said.

The talks are part of broader negotiations that include appointments to the judicial system's governing body, the anti-trust watchdog and the stock market supervisor. Pablo Hernandez de Cos stepped down as governor after his term expired last week. The bank is being led on an interim basis by Deputy Governor Margarita Delgado, who can participate but not vote in ECB council meetings.

"We are working precisely to be able to ensure that Spain has an official representative at the next meeting," Cuerpo said in a radio interview on RNE late on Wednesday. The government usually appoints the governor while the opposition party proposes a deputy governor. Should they fail to agree, Delgado could remain as acting head until September when her term ends, Cuerpo said.

Earlier this month, the ECB voted to lower its deposit rate by 25 basis points to 3.75%, joining other central banks in starting an easing cycle, but wage pressures mean a series of rapid rate cuts is unlikely. Among the list of candidates favoured by the ruling Socialists to replace De Cos are former Treasury head Soledad Nunez and Montserrat Martinez, deputy president of the stock market regulator, sources have told Reuters.

Fernando Restoy, chairman of the Financial Stability Institute, and Jose Manuel Campa, head of the European Banking Authority, are also on the list. The People's Party has Fernando Fernandez, a current member of the Bank of Spain governing council, among its candidates for deputy governor.