IMF chief hails completion of Spanish bank stress test

Christine Lagarde, managing director of the Washington-based International Monetary Fund (IMF), on Friday welcomed the completion of Spain's banking sector assessment. "This thorough and transparent independent valuation of assets and stringent stress tests will help provide significant and helpful differentiation among financial institutions," she said in a statement issued here. "Public funding of the banks' actual capital needs, which are expected to be lower than the amounts identified in the stress tests, can be financed comfortably under the recapitalization program supported by Spain's European partners," she noted. "I strongly support the authorities' commitment to ensure that capital needs are met in a timely manner and that the weakest banks are dealt with effectively. These key steps, as recommended in the IMF's Financial Sector Assessment Program (FSAP) for Spain conducted earlier this year, will contribute to build a sounder banking system, which in time will help to restart credit flows and boost growth and employment," added the IMF chief. Spain carried out the bank stress test as part of the conditions agreed in July for a European bailout plan in the amount of 100 billion euros for its ailing banking system.