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Date: 11 Jun 2012
Title: IMF welcomes financial support for Spain
Pretoria - International Monetary Fund (IMF) Managing Director Christine Lagarde has welcomed the Eurogroups' commitment to support Spain financially.
Eurozone finance ministers confirmed at the weekend that the single-currency area is ready to offer up to 100 billion euros (about 125 billion US dollars) in financial aid to rescue Spain's ailing banking sector. "The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total," the Eurogroup said in a statement on the European Commission's website after an emergency conference call of finance ministers.
Lagarde said she strongly welcomed 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," she added.
"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. 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."
Lagarde said the IMF stands ready, at the invitation of the Eurogroup members, to support the implementation and monitoring of this financial assistance through regular reporting.
On Thursday, rating agency Fitch cut Spain's sovereign credit rating by three notches to BBB, following the downgrade of five Spanish banks by Standard & Poor's and four of Spain's autonomous communities by Moody's in May. - BuaNews-Xinhua