The Spanish Cabinet on Friday approved a decree allowing bankers with criminal convictions to continue in the profession, a move that will allow Alfredo Sáenz to remain as chief executive officer of Banco Santander, the country’s biggest bank.

Sáenz was sentenced to three months in jail for false accusation, but was subsequently pardoned by the government despite a recommendation by the Supreme Court that there were no "reasons of justice or equity" for a pardon. The Supreme Court subsequently partially overruled the pardon, leaving Sáenz’s conviction on record.

Deputy Prime Minister Soraya Sáenz de Santamaría told a news conference that the decree allows convicted bankers to remain in office provided that they have maintained their “honorability.”

The Economy Ministry said the decree adapts current legislation to conform to the norm in Europe. The European Banking Authority (EBA) recently issued a document stating that people with criminal records could still work as bankers.

Under the concept of "honorability" previously established by the Bank of Spain, those with criminal records could not be employed as bankers.

The decree changes the definition of “honorability” to the ability to demonstrate “personal, commercial and professional conduct that does not throw up doubts about [a person´s] ability to carry out diligent and prudent management of a bank.”

The facts to be taken into account to determine if this is the case include the track record of the executive, director or employee in question with respect to the regulatory and supervisory authorities; the reasons for possible dismissal in previous posts; the results obtained while in their posts and whether they have been involved in the management of a bank that went bust. Other factors include the nature of the conviction, for example, whether it was for fraudulent behavior.

In cases of employees not meeting the “honorability” criteria, banks will have six months to replace them under the new regulations.