Jean-Claude Junker, President of the Eurogroup, considers that the results of the independent valuation of Spanish banks show that the financial assistance decision to Spain in the form of a banking recapitalisation programme (it would cover financing needs of up to €100 billion) is adequate. Upon approval of the restructuring and/or orderly resolution plans, the recapitalisation of a first group of banks is scheduled to occur by November, according to the European Commission.

The results of the independent valuation of Spanish banks carried out by an external consultant with regard to 14 banking groups comprising more than 90% of the Spanish banking system shows, according to Mr Junker, President of the Eurogroup, that the €100 billion agreed to cover financing needs on 20 of July is adequate. The stress test confirms that the total capital shortfall of the Spanish banking sector comes out at slightly less than €60 billion. On 20 of July, it was also decided that the FROB will receive the funds from the Eurogroup and channel them to the financial institutions concerned in Spain.

These needs for individual banks 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.

The European Commission announced that the next step would be the presentation of recapitalisation plans by banks with a capital shortfall. 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 of banks is scheduled to occur by November.