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Press Release: Statement on the Fourth Financial Sector Monitoring Mission to Spain
September 30, 2013
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IMF COMMUNICATIONS DEPARTMENT |
| Media Relations |
|---|
| E-mail: media@imf.org |
| Phone: 202-623-7100 |
September 30, 2013
IMF COMMUNICATIONS DEPARTMENT |
| Media Relations |
|---|
| E-mail: media@imf.org |
| Phone: 202-623-7100 |
A staff team from the International Monetary Fund (IMF) visited Madrid September 16-30 for the fourth independent monitoring mission of the financial sector in the context of the European financial assistance for bank recapitalization, as agreed with the Spanish authorities and the European Commission (EC) on July 20, 2012 (see Terms of Reference). The team met with official and private-sector representatives and discussed its preliminary findings with the Spanish authorities and their European partners at the end of the visit. Staff will convey a final report to the authorities and the EC by mid-November.
The mission found that implementation of Spain’s financial sector program remains on track. Nearly all measures specified in the program have now been implemented, as envisaged under its front-loaded timetable. Of note, capital-augmentation measures arising from last year’s stress test are now essentially complete, as is SAREB’s organizational development. SAREB is deploying a wide range of strategies for liquidating its assets, which it is now doing at an accelerating pace.
Actions under the program since its inception have bolstered the financial system’s capital, liquidity, and efficiency. Such effects have added to key policy measures at the European level to help support improved financial market conditions and a sizeable fall in Spain’s sovereign risk premium since mid-2012. These trends have continued since the last monitoring mission. Recent macroeconomic developments have also been positive, with output and unemployment stabilizing. Nonetheless, the economy is still undergoing a difficult process of correcting pre-crisis imbalances that continues to pose headwinds and risks for the economy and hence also for the financial sector.
Strong financial-sector policies will help safeguard and build upon the program’s gains going forward. Priorities include measures to further enhance banks’ ability to lend and support recovery:
Further progress on structural reforms of the financial sector is also important to promote sound governance and a more stable financial system over the longer term. A near-term priority in this regard is to adopt savings bank reform, which is a goal of the program and currently in parliament, in a timely manner and without watering down its provisions.
The fifth financial sector monitoring mission is expected to take place in December 2013.
