Staff from the European Commission, in liaison with staff from the European Central Bank, visited Madrid from 8-9 October for the twelfth post-programme mission to Spain. Staff from the European Stability Mechanism participated in the meetings in the context of its Early Warning System. The mission focused on financial sector developments and also discussed macroeconomic and budgetary developments, in view of the forthcoming Commission autumn 2019 forecast and the subsequent assessment of the Draft Budgetary Plan, due to be presented by the Spanish authorities by 15 October. Staff discussed the performance of the overall banking sector and recent credit developments, focusing on solvency, liquidity position and profitability, as well as the evolution of non-performing loans. They held discussions on banks that had received state aid and had undergone restructuring. The mission continued to monitor asset management company SAREB’s implementation of its business strategy and was updated by its management on progress with the company’s divestment strategy. The surveillance report reflecting the detailed findings of this mission is scheduled for publication in early December 2019. The next post-programme surveillance mission will take place in spring 2020.