Spain's banking reforms 'on track'
Upbeat assessment of progress since €40bn bail-out.
By Ian Wishart
June 3, 2013 9:44 am CET
Spain's fragile banking sector is showing signs of stabilisation, officials assessing the country's response to the eurozone's financial aid programme have said.
Experts from the European Commission, together with representatives from the European Central Bank (ECB), the European Banking Authority (EBA), and the European Stability Mechanism (ESM) – the organisation that runs the eurozone's bail-out fund – said that reforms associated with the financial assistance remained "on track".
Spain was granted a loan of €40 billion from the ESM in December to help prop up its struggling banks. Eurozone countries agreed a credit line of up to €100bn last summer.
"Spanish financial markets have further stabilised since the last review, with sovereign and corporate bond yields dropping amidst lower volatility," the review report, published today (3 June), said.
It said that Spanish banks, which were badly affected by the bursting of the country's property bubble, were now less reliant on emergency funding to keep them afloat.
"The solvency position of Spanish banks has been bolstered after the recapitalisation of parts of the banking sector and the transfer of assets to SAREB [the Spanish asset management company], and solvency rates are above regulatory requirements," said the review team, who were assisted by officials from the International Monetary Fund in their role as independent monitors.
"The process of bank restructuring is well under way, guided by the restructuring plans, as adopted by the European Commission, for the banks having received state aid," the report said.
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