BRUSSELS (MNI) – The European Commission on Friday welcomed Spain’s
last minute adoption of new laws paving the way for a state-owned bad
bank to help clean up the country’s banking sector and for a frame work
to wind down failing banks.

The laws, adopted on the last day of a deadline set under Spain’s
MOU with its Eurozone partners for up to E100 billion of aid for
troubled banks, “sends an important signal of Spain’s determination to
comply fully with the requirements and timeframe set out in the
Memorandum of Understanding,” EU Commissioner for Economic and Monetary
Affairs, Olli Rehn, said in a written statement.

The legislation, which was drafted in close cooperation with
Commission officials, “provides the necessary legal basis to effectively
carry out a comprehensive restructuring of those Spanish financial
institutions that are in need of external support, including the
effective segregation of impaired assets from bank balances and their
transfer into a separate Asset Management Company,” he said.

A comprehensive analysis of individual banks’ capital needs and
viability is expected to be completed by the Commission in October.
Under the terms of the agreement with Madrid, banks deemed non-viable
could be closed.

–Brussels newsroom: +324-9522-8374;

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