FRANKFURT (MNI) – The following is the European Commission’s
statement on the publication of results of stress tests of Spanish banks
released on Friday:

“European Commission statement on the publication of results of
stress tests of Spanish banks The European Commission welcomes today’s
publication by the Spanish authorities of the results of the independent
valuation of Spanish banks. This is a major step in implementing the
financial-assistance programme and towards strengthening the viability
of and confidence in the Spanish banking sector.

In line with the Memorandum of Understanding governing the
financial-sector programme for Spain, an external consultant conducted
over the past few months a stringent bank-by-bank (bottom-up) stress
test and a thorough asset quality review. The European Commission was
closely involved in this process, as were the ECB, the EBA and the IMF.

The capital needs for individual banks disclosed today are a key
step in the process of restoring and strengthening the soundness of the
Spanish banks. They will form the basis for the eventual
recapitalisation of banks with the help of the programme. The necessary
State aid provided to Spanish banks will be determined in the coming
months. It will be based on today’s published results. It will also
reflect measures to be taken by the banks, such as the disposal of
assets, other restructuring measures and tapping funding markets, and
subordinated liability exercises. In addition, the capital shortfall of
credit institutions receiving public funds will be adjusted as a
consequence of the transfer of assets to the Asset Management Company.

Banks with a capital shortfall will present recapitalisation plans.
Upon approval of these recapitalisation plans by the Bank of Spain and
the European Commission, banks requiring state aid will present
restructuring or orderly resolution plans to the Spanish authorities,
which will notify these to the European Commission for approval under EU
state aid rules. Upon approval of these restructuring and/or orderly
resolution plans, the recapitalisation of a first group.”

–Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@mni-news.com

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