Op-ed: Salary limits for managers of state-funded savings banks

The Spanish government will limit salaries paid to savings bank directors. Fully nationalized banks will pay a maximum of 300,000 euros to managers, and banks receiving public aid will cap manager salaries at 600,000 million. This is a measure that the Bank of Spain should have already enacted, especially because it was responsible for controlling bonus pay for these institutions.

Still, it is true that there are enormous differences between some managers and others. The manager who has recently arrived at a lender that is in dire straights financially is different than those who have managed their banks since before the crisis began and how continue to manage despite recently receiving public aid. For this reason, it will be necessary to establish clear differences in how managers are viewed.

Banks will not have to gather provisions for these troublesome loans and could even raise interest rate margins, which will be made more viable in the plans that they are putting in front of the authorities. Some banks will turn to the Frob for aid that is expensive and difficult to pay back. If it is not repaid, the State will take possession of the assets. We will end up paying for the same funds that we don't want to give now, so it is better than salaries are capped.