Ángel Gavilán, the Director of Economics at the Bank of Spain, has submitted his resignation internally, becoming the third senior official to depart since José Luis Escrivá assumed leadership of the institution.

This follows the exits of Alejandro Álvarez, the Director of Services and Personnel, and Ángel Estrada, the Director of Financial Stability.

Both Estrada and Gavilán were integral to the bank's intellectual framework, supporting the governor in assessing public policies.

They had been appointed by former governor Pablo Hernández de Cos.

Gavilán will remain in his position until June 12, while plans for his successor are underway.

Escrivá intends to convene a committee of experts to oversee the selection process, with proposed inclusion of notable figures such as the Chief Economist of the Bank of England and Andreu Mas-Collel, a distinguished academic and former economy advisor to the Catalan government.

Among the senior officials originally appointed by Hernández de Cos, only Mercedes Olano, the Director of Banking Supervision, and Alberto Ríos, the Director of Financial Conduct and Currency, continue in their roles.

The timing of Gavilán's resignation coincides with the preparation of the annual report, which has been notably descriptive, lacking substantial references to the government's economic policies.

The report recommends a more ambitious approach to fiscal planning, describing it as a missed opportunity, and suggests that unemployment benefits should include work incentives.

This represents a significant shift from the bank's traditional stance of providing extensive economic policy recommendations irrespective of the governor’s identity.

Particularly striking is the report’s minimal commentary on pensions, stating only that they have passed scrutiny from Brussels and are contributing to increased public spending.

It is relevant to note that Escrivá was the author of the pension system reform while in government before transitioning to the bank's leadership.

Prior to Gavilán's resignation, the bank's oversight indicated that Escrivá's pension reform did not ensure the system's sustainability, necessitating further measures.

The Economics Directorate has encountered skepticism from the government due to its critiques of certain public policies, including minimum wage increases and pension reform.

Escrivá has already restructured the department, reducing its control over statistics and dissemination, and is reportedly planning additional changes.

Furthermore, it has been suggested that the department's traditional location may be repurposed into a museum showcasing the artworks held by the Bank of Spain, a move seen by some as indicative of a downgrading of the department’s status.

The recently established general directorate of institutional relations, functioning as an expanded cabinet for the governor, is now managing operations alongside the directorates of strategy, personnel, and data.

Sources indicate that the situation in the Economics Directorate has become untenable due to external interference in their affairs, particularly concerning the annual report.

When questioned about the lack of commentary on public policies in this year's report, Gavilán clarified that the bank had not altered its opinions but had instead synthesized the most recent studies.

This contrasts with previous annual reports, which included thorough analyses of the economic situation and recommended necessary policy actions.

The Bank of Spain seems to be distancing itself from its previous role as a prescriber of best practices in economic policy.

The Bank of Spain’s Economics Department is responsible for drafting the annual report, following directives from the governor before presenting the draft to the council for review and potential modification prior to approval.

This customary process appears to have met with disruption this year, as sources indicate that Governor Escrivá intervened to exclude certain topics from initial report drafts before they reached the council for discussion.

This contrasts with Hernández de Cos's approach, which was characterized by persuasion rather than imposition.

Following the announcement of Gavilán's resignation, the Bank of Spain has issued a call for expressions of interest in the role, with no further official commentary made.