## Spain: Financial Sector Assessment Program—Technical Note on Regulation and Supervision of Less Significant Institutions

_IMF Staff Country Reports, August 1, 2024_

## Source details

**Canonical URL:** [Spain: Financial Sector Assessment Program—Technical Note on Regulation and Supervision of Less Significant Institutions](https://www.imf.org/en/publications/cr/issues/2024/08/01/spain-financial-sector-assessment-program-technical-note-on-regulation-and-supervision-of-552818)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/08/01/spain-financial-sector-assessment-program-technical-note-on-regulation-and-supervision-of-552818/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/08/01/spain-financial-sector-assessment-program-technical-note-on-regulation-and-supervision-of-552818/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/08/01/spain-financial-sector-assessment-program-technical-note-on-regulation-and-supervision-of-552818/bundle-manifest.json)

## Bibliographic details
- Published: August 1, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400285820.002

---

### Executive findings
- The Banco de España’s (BdE) extensive efforts to improve corporate governance of cooperative LSIs are commendable.
- BdE monitors LSIs’ capital and liquidity levels and exposures to interest rate risk in the banking book (IRRBB).
- Extensive regulatory requirements and supervisory activities of LSIs’ credit risk have been instrumental in covering credit risk as a key priority.
- Gaps exist in the related-parties framework that need reform to address shortcomings relative to international standards.
- Joint work between the BdE and Sepblac presents an opportunity to enhance the risk-based aspects of oversight of anti-money laundering and countering the financing of terrorism (AML/CFT).

### Supervisory priorities and gaps
- Corporate governance
  - Recommendation: Continue BdE work to improve corporate governance of cooperative LSIs with additional focus on onsite activities.
- Liquidity risk and IRRBB
  - Finding: Existing monitoring covers capital, liquidity levels, and exposures to IRRBB.
  - Recommendation: BdE should further increase supervisory scrutiny of LSIs’ management of liquidity risk and IRRBB.
- Credit risk and related parties
  - Finding: Extensive regulatory requirements and supervisory activities have been instrumental in addressing credit risk.
  - Recommendation: Reform the related-parties framework to address gaps relative to international standards.
- AML/CFT oversight
  - Finding: BdE’s joint work with Sepblac should be leveraged.
  - Recommendation: Use the BdE–Sepblac collaboration to enhance risk-based oversight of AML/CFT.

### Policy recommendations (summarized)
- Continue and deepen corporate governance improvements for cooperative LSIs, emphasizing onsite supervisory activities.
- Increase supervisory scrutiny of LSIs’ liquidity risk management and IRRBB beyond current monitoring.
- Reform the related-parties framework to close gaps versus international standards and strengthen credit-risk oversight.
- Enhance the risk-based aspects of AML/CFT oversight through BdE and Sepblac joint initiatives.

*Spain: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions (August 1, 2024).*

---

## Content in this bundle

- **1espea2024006-print-pdf — EXECUTIVE SUMMARY**
  - [1espea2024006-print-pdf — EXECUTIVE SUMMARY (Markdown version)](/-/media/files/publications/cr/2024/english/1espea2024006-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [1espea2024006-print-pdf — EXECUTIVE SUMMARY (PDF)](/-/media/files/publications/cr/2024/english/1espea2024006-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/cr/issues/2024/08/01/spain-financial-sector-assessment-program-technical-note-on-regulation-and-supervision-of-552818_