26 October 2012

Statement by the EC and the ECB following the conclusion of the first review of the financial assistance programme for Spain

A delegation of the European Commission, in liaison with the European Central Bank and the European Stability Mechanism, undertook from 15 to 26 October 2012 the first review mission of the financial assistance programme for Spain. The mission obtained a detailed update about the macro-financial situation of Spain and the current performance of all the major Spanish banks. While the overall financial market conditions in Spain have improved since the start of the programme and funding strains have been reduced, the challenges to parts of the banking sector remain very acute and warrant decisive policy action as outlined by the programme's Memorandum of Understanding (MoU). The mission also reviewed the status of, and progress in, a broad range of horizontal financial sector conditionality, including the enhancement of the credit registry, the improvement of banks' transparency, the further development of non-banking financial intermediation and the strengthening of the governance of former savings banks. In these areas, despite the complexity of the issues at stake, preparations by the Spanish authorities seem well advanced in order to allow for timely policy action in line with the MoU.

Furthermore, the mission reached agreement with the Spanish authorities on important aspects of the design and functioning of the future Asset Management Company (AMC), including on its overall size and governance. This will, as a cornerstone of the programme, allow the AMC to be operational as of 1 December.

Press release

In a statement, Vice President Rehn said:

I warmly welcome today's positive assessment of the implementation of the Spanish financial sector programme. This is another step towards the thorough repair and reform of the banking system in Spain, which is in turn an essential building block for a return of investor and consumer confidence.

In the coming weeks, the European Commission will proceed with the assessment of the recapitalisation and restructuring plans of Spanish banks, which should pave the way for the first disbursements for entities in need of public support, as foreseen in the programme. In parallel, we will remain in close contact with the Spanish authorities as they move forward with the strengthening of the regulatory and supervisory architecture of the financial sector and with the setting up of the Asset Management Company.

I recall that this programme is one of three key elements of the response to the crisis in Spain, together with the necessarily ambitious fiscal consolidation strategy and the far-reaching structural reform programme. I am confident in the commitment of the Spanish government to proceed with determination on all of these fronts, and in the capacity of the Spanish economy to generate the sustainable growth needed to boost job creation.

Press release © European Commission

© ECB - European Central Bank