IMF welcomes Eurogroup financial aid to Spain

Sunday, June 10, 2012

Washington: International Monetary Fund (IMF) has welcomed the Eurogroup’s commitment to financially assist Spain in its efforts to strengthen its banking sector.

In a statement issued to the press, IMF Managing Director Christine Lagarde termed this as a “crucial step” for the success of the Spanish authorities’ strategy.

“I strongly welcome the statement by the Eurogroup, which complements the measures taken by the Spanish authorities in recent weeks to strengthen the banking system. Providing a credible back stop to recapitalize weaker segments of the banking system has been a key recommendation of the IMF's recent Financial Sector Assessment Program (FSAP) conducted in Spain. The willingness of Spain’s Euro Area partners to financially support the Fund for Orderly Bank Restructuring (FROB) with up to EUR 100 billion is a crucial step for the success of the Spanish authorities’ strategy,” Lagarde said.

She expressed that this scale of proposed financing, which is consistent with the capital needs identified in the FSAP, gives assurance that the financing needs of Spain's banking system will be fully met.

“The IMF stands ready, at the invitation of the Eurogroup members, to support the implementation and monitoring of this financial assistance through regular reporting," the IMF head added.
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