A joint ECB/EU report has found Spain's banking sector is on the mend as tests continue to gauge its shock resiliency and solvency. Madrid was due to exit the bailout program for lenders in January.
In a joint survey released Monday, the EU executive and the Central European Bank (ECB) noted eurozone member Spain had made huge progress in getting its ailing banking sector back on its feet after years of reeling from a 2008 real estate collapse.
The report assessed Spain's ability to meet the targets under a financial assistance program for its biggest lenders which had received 41 billion euros ($56.5 billion) from fellow euro area nations in 2012 and 2013.
EU and ECB officials emphasized financing conditions for the economy had improved significantly as yields for sovereign bonds decreased and share prices kept rising in the nation which was due to exit its banking-sector bailout program in January of next year.
Bit it warned heavy debt burdens continued to weigh on lending to the corporate sector, with the adjustment of the real estate market in full swing, but not yet completed.
The report gave good marks to the current overhaul of banks' governance and regulatory framework.
Spain emerged from recession in the third quarter of this year and is expected to log at least 0.5-percent growth in 2014, while record-high unemployment of around 26 percent looks set to drop only gradually over the next couple of years.
hg/msh (dpa, Reuters)