[1] At the start of the Second Spanish Republic in April 1931, Carabias was appointed governor of the Bank of Spain in place of Federico Carlos Bas Vassallo.

[2] Carabias prepared to open negotiations with foreign banks to obtain credits that would finance a stronger peseta and would avoid speculations that threatened to destabilize the currency, which he viewed as an extreme danger.

The board of the bank opposed the export of gold, arguing that this would be futile unless the budgetary policy was changed since this was the root cause of the decline in the peseta.

[2] Since budgetary tightening would cause economic pain, Carabias frequently found himself in conflict with politicians during the summer of 1931.

[2] Carabias pointed out that allowing unlimited inflation would have the effect of ruining the rich, so the bank's advisers were in favour of stabilizing the peseta.

[7] Relations between the Bank of Spain and the government eased when the gold standard was suspended in Great Britain on 21 September 1931, and the Spanish monetary authorities abandoned the policy of maintaining the peseta at all costs.

[8] After Prieto left office, Carabias served under Jaime Carner from 16 December 1931 and then Agustín Viñuales from 12 June 1933.

On 14 September 1936, he and the Director General of the Treasury, Francisco Méndez Aspe, supervised the transfer of about 560 tons of gold to the Cartagena naval base.