A new royal decree-law for the rationalization of the financial system has been approved

Following the approval since 2008 of several regulations in order to shore up, restructure and strengthen the Spanish financial system, which included the regulation which created the Fund for the orderly restructuring of the Spanish financial system (the “FROB”), the Spanish Council of Ministers approved a new Royal Decree-law 2/2012 (“RDL 2/2012”), which entered into force on 4 February, aiming to complete the rationalization of the Spanish financial system by correcting the several deficiencies still persisting.

RDL 2/2012’s main objectives are (i) to strengthen and rationalize the balance sheets of Spanish financial institutions, reassessing their big exposure to real estate risk, (ii) to give incentives to new integration processes among Spanish financial institutions, and (iii) to reinforce new corporate governance rules for financial institutions which have received financial support from the FROB.

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