Bank of Spain
The Bank of Spain () is the central bank of Spain. Established in Madrid in 1782 by Charles III, today the bank is a member of the European System of Central Banks and the Eurosystem; it is also Spain's national competent authority for banking supervision within the Single Supervisory Mechanism. Its activity is regulated by the Bank of Spain Autonomy Act. Until January 1999, when Spain adopted the euro, the national central bank was responsible for the former Spanish currency, the peseta. History Originally named the Banco Nacional de San Carlos, it was founded in 1782 by Charles III in Madrid, to stabilize government finances through its state bonds (vales reales) following the American Revolutionary War in which Spain gave military and financial support to the Thirteen Colonies. Although it aided the state, the bank was initially owned privately by stockholders. Its assets included those of "Spanish capitalists, French rentiers, and several treasuries of Indian communities in New Spain" (colonial Mexico). Its first director was the French banker François Cabarrus, known in Spain as Francisco Cabarrús. Following the Napoleonic invasion of Spain during the Peninsular War between 1808 and 1813, the bank was owed more than 300 million reales by the state, placing it in financial difficulty. Treasury Minister Luis López Ballesteros created a fund of 40 million reales in 1829 against which the bank could issue its own notes at Madrid. It did so after renaming itself (the name of the king of Spain was Fernando VII). In 1844 the competing Banco de Isabel II and were established, followed in 1846 by the . In 1847, after overexposure in the failing property market of Madrid, the Banco de Isabel II merged with Banco de San Fernando and retained the latter name. Under the guidance of Ramón Santillán in the 1850s, the bank extended its operations to the cities of Alicante and Valencia and took the name, . Requiring financial support from the bank to back its civil and colonial wars, the government of Spain granted the Banco de España a monopoly on the issuance of Spanish bank notes in 1874. Construction of the bank's headquarters building began in 1884 at the crossing of the Calle de Alcalá and the Paseo del Prado in Madrid. In 1936, 510 tonnes of gold reserves were transferred to the Soviet Union (in an event known as Moscow gold) corresponding to 72.6% of the total gold reserves of the Bank of Spain. That gold remained there during the Spanish Civil War. In 1946, the government of General Franco placed the bank under tight control. It was formally nationalised in 1962. After the restoration of democracy in the late 1970s, the bank began a series of transformations and modernisations which continue to today. On Spain's entry into the Economic and Monetary Union of the European Union in 1994, the Banco de España became a member of the European System of Central Banks. The Bank of Spain holds 8.84% of the ECB's capital. Governing structures The