Press Release No. 12/172

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement on the measures announced by the Spanish authorities to strengthen the country’s banking sector:

“I strongly welcome the comprehensive set of measures announced today by the Spanish authorities. These measures offer an effective response to the vulnerabilities of the banking system while appropriately providing greater transparency and differentiating the needs of the various financial institutions. We endorse the authorities’ approach of significantly raising provisions as a cushion against potential future losses, of providing a government backstop to those institutions that may need additional time, of restructuring and resolving the banks with state participation, and of implementing an independent diagnostic review of all banks’ portfolios to frame appropriately further steps.

"These actions, which are in line with the recommendations of the IMF’s Financial Sector Assessment Program (FSAP) mission, that recently visited Madrid, are consistent with best international practice and demonstrate the authorities’ resolve to ensure the stability of the banking system. The full implementation of these measures will help bolster confidence and support the economy’s return to growth.”