The European Commission and the European Central Bank published the results of the first review mission of the financial-assistance programme for Spain. The results highlighted that while the overall financial market conditions in this country 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.

The first review mission of the financial-assistance programme for Spain jointly carried out by the European Commission and the European Central Bank from 15 to 26 October 2012 has successfully concluded. According to a joint statement, the findings of this mission point to a successful programme whose implementation is on track. The International Monetary Fund also participated in the meetings as part of its independent monitoring. The Spanish recapitalisation scheme for credit institutions received Commission's green light in July 2012.

The findings of the mission also show that the challenges to parts of the banking sector remain very acute and warrant decisive policy action as outlined by the programme´s Memorandum of Understanding (MoU), while the overall financial market conditions in Spain have improved since the start of the programme and funding strains have been reduced. On the other hand, the mission reached an 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.

A detailed update about the macro-financial situation of Spain and the current performance of all the major Spanish banks was outlined by the mission. 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.