(Adds detail, background)
MADRID, April 16 The Bank of Spain said on
Tuesday it would open new proceedings to decide the fate of
Santander's chief executive, who holds a criminal
conviction, after the country passed a law last week that could
help keep him in his post.
The central bank must decide if Alfredo Saenz, 70, is fit to
continue in his role at the helm of the euro zone's biggest
bank, based on the new banking ethics law.
The law helps Spain adhere to European recommendations for
tighter oversight of how banks behave, but the new arrangement
also gives the Bank of Spain more discretion to decide on
individual cases, drawing on opinions from legal experts.
Until last week, top banking executives with a criminal
record would in most cases have to be declared unfit to hold
such a position.
Saenz was convicted in 2009 of filing a false complaint
against shareholders in Santander-owned Banesto bank to pressure
them to pay a debt, in a case that first arose more than a
He was pardoned and a brief jail sentence was suspended. But
in the latest twist in a case that has dogged him for years,
Saenz's criminal conviction was reinstated earlier this year by
Spain's Supreme Court.
The central bank said in a statement on Tuesday it had
dropped its previous proceedings over Saenz's fate, opened in
February, which took the old law as their reference point.
Santander declined to comment.
Saenz has fought the conviction and plans to appeal the
Supreme Court's ruling, a source familiar with his legal team's
thinking has said.
The case has so far not damaged Saenz's standing in the eyes
of shareholders and he has not come under pressure in Spain to
Spain's new rules on the ethics and skills of top bankers
are part of a Europe-wide drive to improve the quality of
executives and board members at financial institutions following
the financial crisis.
The Economy Ministry has said the new law puts Spain in line
with recommendations by the European Banking Authority.
(Reporting by Sarah White; Editing by Julien Toyer and Tom