FINANCIAL INFRASTRUCTURE AS A PUBLIC UTILITY UNDER SPANISH LAW

1. INTRODUCTION

Financial infrastructure refers to the institutional, technological, and operational systems that enable the functioning of a country's financial sector. It includes payment systems, banking networks, clearing and settlement mechanisms, automated teller machines (ATMs), electronic money platforms, financial market infrastructure, credit information systems, and digital payment networks.

In Spain, financial infrastructure performs an essential public-interest function because individuals, businesses, public authorities, and commercial institutions depend on reliable financial services to conduct economic activities. Although most financial infrastructure is operated by private institutions, its importance to economic stability raises questions about whether certain services should be regulated similarly to public utilities.

The public-utility approach emphasises continuity of service, universal accessibility, affordability, non-discrimination, operational resilience, and public supervision. Spanish law does not classify the entire financial sector as a public utility. However, certain banking and payment services are subject to public-interest obligations and extensive regulatory supervision.

2. LEGAL FRAMEWORK GOVERNING FINANCIAL INFRASTRUCTURE IN SPAIN

A. SPANISH CONSTITUTION

The Spanish Constitution provides the foundation for public intervention in essential economic activities.

Article 9.2 requires public authorities to promote conditions ensuring effective equality and participation.

Article 38 recognises freedom of enterprise within the framework of the market economy.

Article 51 requires public authorities to protect consumers.

Article 128 recognises the public interest in economic wealth and permits public intervention in essential resources and services under constitutional conditions.

These provisions support the regulation of financial infrastructure where its operation affects economic and social welfare.

B. LAW 10/2014 ON CREDIT INSTITUTIONS

Law 10/2014 establishes the regulatory and supervisory framework for Spanish credit institutions. It imposes requirements concerning authorisation, solvency, governance, risk management, and regulatory compliance.

C. LAW 21/2011 ON ELECTRONIC MONEY

This legislation regulates electronic-money institutions and contributes to the legal framework for digital financial infrastructure.

D. LAW 16/2009 ON PAYMENT SERVICES

This legislation established Spain's earlier payment-services framework and was substantially replaced by the implementation of the revised EU payment-services framework.

E. ROYAL DECREE-LAW 19/2018 ON PAYMENT SERVICES

This legislation implements important elements of the EU Payment Services Directive (PSD2). It regulates payment-service providers, consumer protection, payment execution, security, and access to payment systems.

F. EU REGULATION 2022/2554 (DORA)

The Digital Operational Resilience Act establishes requirements for financial entities concerning ICT risk management, incident reporting, resilience testing, and third-party technology risks. It has applied since 17 January 2025.

G. EU REGULATION 2021/23

This regulation establishes a framework for the recovery and resolution of central counterparties, strengthening the stability of financial market infrastructure.

3. FINANCIAL INFRASTRUCTURE AS A PUBLIC-UTILITY FUNCTION

A. PAYMENT SYSTEMS AS ESSENTIAL INFRASTRUCTURE

Payment systems enable individuals and businesses to transfer money, settle transactions, and participate in economic activities. Disruption can affect wages, commercial transactions, public payments, and household expenditure.

Accordingly, payment systems require operational reliability, security, transparency, and regulatory supervision.

B. BANKING NETWORKS AND UNIVERSAL ACCESS

Bank branches, ATMs, and digital banking platforms provide essential access to financial services. Their geographical distribution is particularly important for rural populations, elderly individuals, and people with limited digital capabilities.

C. CLEARING AND SETTLEMENT INFRASTRUCTURE

Clearing houses and settlement systems ensure the completion of financial transactions. Their failure can create systemic risks affecting multiple institutions and markets.

D. DIGITAL PAYMENT INFRASTRUCTURE

Electronic transfers, card-payment networks, mobile banking, and instant-payment systems have become essential components of economic activity.

Regulatory oversight must address cybersecurity, service availability, operational continuity, and consumer protection.

E. CREDIT INFORMATION INFRASTRUCTURE

Credit information systems facilitate responsible lending and financial risk assessment. Their operation must respect data accuracy, confidentiality, privacy, and applicable data-protection legislation.

4. PUBLIC-UTILITY OBLIGATIONS OF FINANCIAL INFRASTRUCTURE PROVIDERS

The public-utility approach supports the following regulatory obligations:

CONTINUITY OF SERVICE: Essential payment and settlement services should maintain reliable operations and appropriate contingency arrangements.

UNIVERSAL ACCESSIBILITY: Eligible consumers should have reasonable access to legally protected basic banking and payment services.

NON-DISCRIMINATION: Access decisions must comply with applicable equality and consumer-protection legislation.

AFFORDABILITY: Banking and payment charges should comply with transparency and statutory consumer-protection requirements.

OPERATIONAL RESILIENCE: Institutions must maintain appropriate cybersecurity, backup, recovery, and incident-management systems.

TRANSPARENCY: Customers should receive clear information about fees, payment execution, account restrictions, and contractual conditions.

REGULATORY ACCOUNTABILITY: Financial infrastructure providers must comply with supervisory requirements and applicable reporting obligations.

DATA PROTECTION: Personal and financial information must be processed lawfully and securely.

SYSTEMIC RISK PREVENTION: Infrastructure operators must maintain adequate governance and risk-management arrangements.

CONSUMER REMEDIES: Effective complaint-handling and dispute-resolution mechanisms should be available.

5. RELEVANT CASE LAWS

The following judgments establish relevant principles concerning essential services, financial regulation, competition, public-interest obligations, and consumer protection.

1. PAUL AND OTHERS v. COMMISSIONERS OF CUSTOMS AND EXCISE (C-222/02), CJEU (2004)

Authority: Direct.

The Court examined the responsibilities of supervisory authorities in the context of banking-sector regulation and deposit protection.

Legal principle: Banking supervision serves important public-interest objectives, but supervisory responsibilities and liability must be assessed according to the applicable legal framework.

Relevance: Financial infrastructure requires effective regulatory oversight and clearly defined institutional responsibilities.

2. BANCA POPOLARE DI CREMONA (C-475/03), CJEU (2006)

Authority: Analogous.

The Court considered the compatibility of an Italian regional tax with EU law.

Legal principle: National financial and economic regulatory measures must remain consistent with EU legal requirements.

Relevance: Public-interest regulation of financial infrastructure must respect the EU internal market framework.

3. CORBEAU v. REGIE DES POSTES (C-320/91), CJEU (1993)

Authority: Strong analogous authority.

The Court considered the scope of services of general economic interest and the conditions under which exclusive rights may be justified.

Legal principle: Services of general economic interest may receive special regulatory treatment where necessary to perform their public-service functions.

Relevance: This judgment provides a useful framework for analysing whether essential financial services could justify specific public-interest obligations.

4. ALBANY INTERNATIONAL BV v. STICHTING BEDRIJFSPENSIOENFONDS TEXTIELINDUSTRIE (C-67/96), CJEU (1999)

Authority: Analogous.

The Court examined competition-law treatment of collective arrangements involving occupational pension funds.

Legal principle: Certain arrangements serving legitimate social-policy objectives may receive specific treatment under EU competition law.

Relevance: Financial infrastructure serving important social objectives may require a careful balance between competition and public-interest regulation.

5. ALTUN AND OTHERS (C-359/16), CJEU (2018)

Authority: Analogous.

The Court considered the application of EU coordination rules and the importance of effective legal safeguards against abuse.

Legal principle: Public regulatory arrangements must operate within the requirements of EU law and procedural fairness.

Relevance: Financial infrastructure regulation must ensure institutional accountability and effective legal safeguards.

6. UNITED BRANDS COMPANY v. COMMISSION (27/76), CJEU (1978)

Authority: Direct to market power and essential commercial infrastructure principles.

The Court examined abuse of a dominant position under EU competition law, including discriminatory commercial practices and unfair trading conditions.

Legal principle: Dominant market participants must not abuse their economic power.

Relevance: Financial infrastructure operators with significant market power must comply with EU competition requirements and cannot arbitrarily discriminate against users or competitors.

6. ROLE OF SPANISH AND EUROPEAN REGULATORY AUTHORITIES

A. BANCO DE ESPAÑA

Supervises relevant banking activities, monitors payment-service providers within its competence, and contributes to financial stability and consumer protection.

B. EUROPEAN CENTRAL BANK

Exercises monetary-policy functions and banking-supervisory responsibilities within the Single Supervisory Mechanism.

C. EUROPEAN BANKING AUTHORITY

Develops regulatory and supervisory standards supporting consistency across European banking markets.

D. CNMV

Supervises Spanish securities markets and relevant market infrastructures within its statutory responsibilities.

E. EUROPEAN SECURITIES AND MARKETS AUTHORITY

Promotes supervisory convergence and oversees relevant financial-market infrastructure under EU legislation.

7. PRACTICAL REGULATORY AND COMPLIANCE CHALLENGES

Spain faces several challenges in treating financial infrastructure as an essential public-interest service:

Closure of bank branches in rural and economically disadvantaged areas.

Unequal access to cash and ATMs.

Dependence on private digital-payment operators.

Cyberattacks and technological failures.

Concentration of payment infrastructure among a limited number of providers.

Financial exclusion caused by excessive AML compliance.

Data-protection risks associated with centralised financial systems.

Disruption of payment services during emergencies.

Regulatory responses should include operational resilience testing, alternative payment channels, accessible cash services, transparent pricing, competition oversight, and proportionate AML compliance.

8. CONCLUSION

Financial infrastructure is indispensable to the functioning of Spain's modern economy. Although Spanish law does not categorise all financial infrastructure as a public utility, payment systems, banking networks, clearing and settlement mechanisms, and digital financial services perform functions of substantial public importance.

The public-utility approach provides a valuable framework for strengthening continuity, accessibility, affordability, non-discrimination, and accountability. Spanish and EU regulators must therefore ensure that financial infrastructure remains commercially sustainable while serving the wider public interest.

The central legal principle is that essential financial infrastructure should not be governed exclusively by private commercial considerations. Its systemic importance requires effective public supervision, competition safeguards, operational resilience, consumer protection, and reasonable access for all eligible users.