Spain Transfers Financial Merger Authority to Banco de España to Boost Regulatory Independence

The Spanish Ministry of Economy has officially transferred the authority to approve mergers between Financial Credit Establishments (EFCs) to the Banco de España, marking a significant shift in the country’s financial regulatory framework. This reform, part of the newly drafted Consumer Credit Law currently open for public consultation until January 30, 2026, aims to enhance the independence and oversight capabilities of Spain's financial supervisor.

Under the new legislation, the Banco de España will oversee not only mergers but also the creation, closure, and structural changes of financial credit establishments, tasks previously managed by the government. The law mandates that any mergers, splits, or transfers involving these establishments require authorization from the Banco de España, which will set the regulatory procedures for these processes. The merged entity will retain authorization to perform all activities allowed for the combined establishments.

In addition to this transfer of authority, the draft Consumer Credit Law introduces two new categories of lenders—Limited Scope Financial Entities and Authorized High-Cost Credit Providers—to professionalize and stimulate competition in the consumer credit sector. The Banco de España will also supervise the creation and structural modifications of these new entities.

The Ministry clarified that this transfer of regulatory powers is specific to these entity types, highlighting their specialized nature without additional safeguards required for banking services. The reform does not alter the regulatory framework under Law 10/2014, which governs credit entities according to EU banking directives. However, the government intends to maintain some control over public offerings and bank mergers.

This regulatory change follows the government’s opposition to a hostile takeover bid by BBVA for Sabadell in the previous year, underscoring tightening financial supervision practices. Furthermore, the Ministry has launched a separate public consultation to update anti-money laundering regulations to address emerging challenges such as crypto assets, reflecting Spain's commitment to adapting its financial oversight to evolving risks and international standards.

Overall, this legislative update signals a move to strengthen the autonomy and regulatory reach of the Banco de España in managing financial credit establishments while fostering increased market professionalism and competition in consumer credit.