FRANKFURT (MNI) – The following is the statement by the European
Commission and the European Central Bank following the conclusion of the
first review of the financial assistance programme for Spain, released
on the ECB’s website on Friday:

“A delegation of the European Commission, in liaison with the
European Central Bank and the European Stability Mechanism, undertook
from 15 to 26 October 2012 the first review mission of the
financial-assistance programme for Spain. The International Monetary
Fund also participated in the meetings as part of its independent
monitoring. The mission held intensive and productive discussions with
the Spanish authorities, covering the entire range of policies
envisioned under the programme.”

The mission obtained a detailed update about the macro-financial
situation of Spain and the current performance of all the major Spanish
banks. While the overall financial market conditions in Spain have
improved since the start of the programme and funding strains have been
reduced, the challenges to parts of the banking sector remain very acute
and warrant decisive policy action as outlined by the programmes
Memorandum of Understanding (MoU). The mission also reviewed the status
of, and progress in, a broad range of horizontal financial-sector
conditionality, including the enhancement of the credit registry, the
improvement of banks transparency, the further development of
non-banking financial intermediation and the strengthening of the
governance of former savings banks. In these areas, despite the
complexity of the issues at stake, preparations by the Spanish
authorities seem well advanced in order to allow for timely policy
action in line with the MoU.

Furthermore, the mission reached agreement with the Spanish
authorities on important aspects of the design and functioning of the
future Asset Management Company (AMC), including on its overall size and
governance. This will, as a cornerstone of the programme, allow the AMC
to be operational as of 1 December.

Overall, the findings of this mission point to a successful
programme whose implementation is on track. European Central Bank.”

— Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com —

[TOPICS: M$X$$$,M$$EC$,MT$$$$,M$G$$$,MGX$$$]