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UPDATE 1-Bank of Spain chief urges longer mandates, more independence

(Adds details on financial supervision model, context)

MADRID, Dec 22 (Reuters) - Bank of Spain Governor Pablo Hernandez de Cos said on Tuesday the Spanish parliament should have a greater role in the appointment of central bank chiefs and recommended extending future governorship terms to eight years from six.

Central bank chiefs are appointed by the prime minister, but de Cos, who also sits on the governing council of the European Central Bank (ECB), called for the Bank of Spain to be more politically independent.

His intervention follows differences of opinion with the Socialist-led government, which has proposed an increase a 0.9% in civil servants wages and pensions in line with projected inflation.

De Cos has said the COVID-19 crisis is not the right moment for such a rise.

On Tuesday, he told lawmakers that extending the mandate for top officials at the Bank of Spain beyond the electoral cycles of politicians was a “crucial element in reinforcing the independence of individuals and of the institution”.

De Cos said the eight-year terms of the ECB’s Executive Committee members offered a good model for setting mandates for the Bank of Spain’s governor and deputy governor.

He also urged the maintaining of an existing ban on any renewal of the governor’s mandate.

As part of his call for increased autonomy, De Cos said there should be no right of appeal to the economy ministry on the Bank of Spain’s resolutions.

He asked for “in-depth reflection” on the country’s financial supervisory model and advocated the so-called twin-peaks approach, which splits regulation between two authorities and is used in Britain, for example.

Under this model, the Bank of Spain would supervise solvency issues of all the financial entities, including banks, that fall under its umbrella, while the Spanish stock regulator CNMV would oversee markets and business conduct. (Reporting by Jesús Aguado; editing by Andrei Khalip and Barbara Lewis)

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