June 7, 2012 / 7:36 PM / 7 years ago

UPDATE 1-Linde named new Bank of Spain governor

* Linde, 67, first worked in Bank of Spain in 1983

* He had several international postings

* He will have to step down in three years

By Andrés González

MADRID, June 7 (Reuters) - Luis Maria Linde, an economist who first worked at the Bank of Spain in 1983, was named on Thursday as its new governor.

The 67-year-old was appointed to the board of the central bank just two weeks ago, fuelling speculation he was Economy Minister Luis de Guindos’s favoured candidate to take over.

“He has special and exhaustive knowledge of the entity as well as recognised skills in national and international banking issues,” De Guindos told a congress hearing where the name of the new governor was announced.

Linde faces a tough job restoring the reputation of an institution that bears some of the blame for Spain’s financial system being forced to the brink of an international bailout.

Linde will take office next Monday, just a few hours before the International Monetary Fund releases a report that is expected to reveal a 40 billion euros funding hole in the Spanish banking system.

Spanish banks are also expected to send to the Bank of Spain on Monday their plans to comply with two financial sector reforms put forward by the government in February and May.

Linde takes over from Miguel Angel Fernandez Ordonez who stepped down a month before his six-year term was to end. The government blamed him for not acting quickly enough after a 2008 property market crash left banks saddled with hundreds of billions of euros of questionable loans.

De Guindos also announced that Soledad Nunez, former head of Spain’s treasury, would be the central bank’s new deputy governor.

Linde was head of the commercial department at the Spanish embassy in the Soviet Union and then worked in the Economy Ministry.

He has also worked in the international affairs division of the Bank of Spain and was named executive manager of the InterAmerican Development Bank in 2005.

Sources told Reuters that Linde was backed both by the ruling People’s Party and opposition Socialist party.

Ordonez’s appointment had been made exclusively by the previous Socialist government. That attracted harsh criticism because the appointment of the governor and deputy governor had historically been agreed between the two parties.

Another top candidate for the post, who was favoured by the European Central Bank and financial markets, was ex-ECB policymaker Jose Manuel Gonzalez-Paramo.

Under the bank’s statutes Linde will have to retire in three years when he turns 70, and will not therefore be able to complete a six-year term.

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