- POSTED: 17 Dec 2013 05:19
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International creditors who rescued Spain's tottering banks said Monday the sector was on the way to recovery but warned Madrid to be vigilant as the bailout winds up.
MADRID: International creditors who rescued Spain's tottering banks said Monday the sector was on the way to recovery but warned Madrid to be vigilant as the bailout winds up.
"The process of restructuring of banks having received state aid is well underway," the European Commission said in a statement, following its latest visit along with the International Monetary Fund to assess Spain's progress.
"Efforts under the program have made the banking system stronger, safer, and leaner, as has important policy progress at the European level," the IMF said in a separate statement.
They warned however that lending to businesses had yet to pick up as economic risks remain for Spain, which timidly emerged from recession in the third quarter of this year.
They urged Spain to meet its tough financial targets and push on with reforms to ensure a return to growth, while monitoring the recovering banking sector carefully.
Completing the reform agenda will be "imperative" to return the economy to sustainable growth, the commission said.
"Continued in-depth diagnostics of the shock resilience and solvency of the Spanish banking sector remain vital" as they clean out their bad assets, it added.
Spain has drawn 41 billion euros ($56 billion) from a 100-billion-euro credit line offered by the international bodies in July 2012 to the banks, which expires at the end of January.
The banks were laden with bad loans from a real estate crash in 2008, which threw the euro zone's fourth biggest economy into a double recession and left millions jobless.