The European Commission published the Second Review report of Spain's compliance with the Financial Assistance Programme for the Recapitalisation of Financial Institutions. The report is based on the findings of a joint European Commission (EC)/European Central Bank (ECB) mission to Madrid during 28 January – 1 February 2013.
In general, the mission found that the policy conditionality of the programme has so far been met and the programme, and more widely the recapitalisation and reform of the financial sector, is on track. Furthermore, as financial markets have stabilised, funding and liquidity conditions of the Spanish financial sector have improved. In order to build on this momentum, it will be important to maintain the pace of reforms in order to overcome the still significant challenges and conclude successfully the programme.
The report concludes that currently there is no reason to foresee further programme disbursements. Two disbursements were made so far in a total amount of about EUR 41.4 billion for the recapitalisation of State Aided banks and the capital injection into Sareb. The rest of the Spanish banks either were not diagnosed with a capital shortfall in the stress test or were able to cover it by private means.
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