Government proposes creation of Central Bank of Catalonia in case of independence

The Catalan government foresees the creation of a Central Bank of Catalonia, if the country achieves independence, that would monitor the solvency of financial situations and other financial affairs of the state.

The proposed future monetary authority of Catalonia, consisting of around 500 employees, would assume all the standard responsibilities of a central bank, such as maintaining price stability, and managing currency, money supply, and interest rates in accordance with the principles of “independence, transparency, accountability, equality of professional access and efficiency.”

The Catalan government plans to keep the euro as currency, making it essential for Catalonia to have a central bank should it gain self-determination.

In a document revealed to ACN, Catalonia’s department of economy also highlighted that an independent Catalan republic would have a public bank licensed to finance key infrastructure projects, SMEs, research and development, as well as initiatives against social exclusion.

Savings

Amidst fears of people losing their savings, as many banks are already taking their headquarters elsewhere, the document argued that during the transitional period before independence, all deposits from Catalan entities will remain under the protection of Spain’s Guarantee Fund.

The document recognizes that the transfer of the headquarters of CaixaBank and Banc de Sabadell were “legitimate” decisions of a preventative nature made “to avoid leakage of non-Catalan deposits and to reassure shareholders.” It also noted that it could be an attempt to pressurize the Catalan government into not declaring independence, adding to the pressure already “received by the Spanish government.”

Plans for the financial system’s structure in an independent Catalonia were also laid out. There would be two supervisors in charge of monitoring finances; the central bank, and a Catalan investment and market authority which would supervise its “conduct”,  ensuring that investors are protected, and prices are set the correct way.

According to the document, both institutions “would provide Catalonia’ with its own voice in European and international monetary instituions” regarding “the situation of the economy in a Catalan state.”

The ministry of economy also stated that the creation of a central bank “would generate a multiplier effect on GDP resulting from the creation of specialized jobs.” A workforce of around 500 employees would also “place it among the most efficient central banks in Europe.”

The bank would allegedly be able to generate “500 million euros” in net each year for the Catalan economy, which could be used to “improve essential public services.”

It was also suggested that a system would be put in place in order to protect consumers in an attempt to avoid a repetition of the recent financial crisis which affected all of Spain wherein banks revealed bailouts from public funds designed to never be paid back.