Those who live in Spain must be familiar enough with the name of the Bank of Spain. It is the official central bank of Spain which has many important functions and roles for the Spanish government and its people. So it is not surprising that the bank’s operations run in accordance with the laws set by the Spanish government specifically.
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Bank of Spain
Unfortunately, some Spaniards and even many people in the world do not know how important the existence of the Spanish-owned central bank is. This is due to the lack of available information related to such overviews and details. Many also do not understand the history of the establishment of this important bank.
Therefore, to provide a brief overview of the history and benefits of the formation of the Bank of Spain here is some interesting information about this one bank. Take a good look at the following explanation.
The History of Bank of Spain
This bank was originally founded in 1782 by Charles III under the name Banco Nacional de San Carlos. The bank had an important role in supporting the finances in the wartime that occurred around the Spanish territory at that time. Therefore, the position of this bank can be said to be quite important as a source of funds and financial guarantees of the country in the face of war conditions.
In 1844, the bank expanded by merging with Banco de San Fernando. So this helps strengthen the financial position of banks that had previously been shaken due to considerable debt. Then in 1884, the construction of the bank’s headquarters began precisely in the Madrid region. Until finally in 1962 this bank officially became a national bank owned by the Spanish state.
In 1994, when there was a unification of economic conditions in the European Union, the Bank of Spain became a member of the European System of Central Banks. Which is thanks to this, the bank can pocket about 8.8% of the European System of Central Banks funds.
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Until now the bank continues to operate and becomes an important bank for the Spanish state in supporting the country. There are various important things that underlie the role of the country. Furthermore, the following paragraphs will provide an explanation regarding the function and role of this Spanish government-owned bank.
Important Functions of Bank of Spain
In general, the Bank of Spain has many important functions. Especially in its position as a national bank in Spain as well as a bank that is part of the European Union. Some of its important functions that are quite famous are among others as described below.
1. As part of the European Union, of course, the Bank of Spain becomes the implementer of the monetary policy set by the European Union.
So this confirms the bank from Spain to carry out various strategic policies related to monetary conditions in the country of Spain with reference to the provisions directed by the European Union in general. This the bank helps support monetary strategic policy in the European Union fully.
2. The Bank of Spain also plays a role in overseeing and controlling currency exchanges taking place in Spain.
As part of the European Union, the bank ensures that the Euro exchange rate will hold up well and not experience a significant pace in foreign exchange trading in the market. Therefore, this bank is also one of the control systems in Spain regarding the exchange of euro currency fully.
3. As an official state-owned bank, it is also entitled to issue bond letters to several other banks in the Spanish territory. Not only that, but its function also helps issue banknotes to all banks in the Spanish territory.
Whereof course as part of the European Union, this still refers to the policy agreed between the countries that are members of the European Union. So that the mechanism of banknotes issuance from this bank is well controlled.
4. The Bank of Spain also plays an important role in helping to oversee other financial institutions in the country.
Especially related to financing and credit issued by certain financial institutions. This the role of this Spanish state-owned bank includes overseeing the financial condition and assets of other bank institutions in the country of Spain.
5. The next important role of the bank included taking full control of the circulation of coins and currencies in Spain. In other words, the bank is in the most important control in terms of inflation rate as well as currency turnover in the Spanish territory.
The bank’s functions in this regard include pressing and ensuring prices are in line with the value and inflation rate agreements set by the EU to avoid significant differences between European countries.
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That’s some information related to the history to the role and current situation of the Bank of Spain located in Spain, Europe. Through the above information, at least many are starting to understand how important the operation of the Spanish government-owned bank is. Especially in maintaining the financial stability of the Spanish state until as a guarantee of finance for strategic projects that are running on the territory of Spain.
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