Regulatory Alerts2012-12-10
Memorandum of Understanding on Financial Sector Policy Conditions and Framework Agreement for Financial Assistance
The European Commission and Spain signed a Memorandum of Understanding on July 23, 2012, establishing strict financial sector policy conditions for Spanish bank recapitalization and restructuring under the European Financial Stability Facility. The agreement mandates a comprehensive asset quality review, bank-by-bank stress tests, and the segregation of non-performing assets to restore market access and financial stability. Spain committed to consulting ex ante with EU institutions on financial policies and implementing a phased recapitalization plan for vulnerable banks by late 2012.
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