The Bank of Spain will receive a visit from the International Monetary Fund (IMF) next week. According to sources from the financial industry, a team of experts from the Monetary and Capital Markets Department (MCM) will go to Madrid to monitor the course of Spanish lenders' accounts and evaluate potential needs.
The visits are within the framework of proposals that the IMF is currently considering according to the European Stability Fund. According to sources in the industry, the IMF wants to modify its Financial Sector Assessment Program (FSAP) so that they can utilize it to support the Bank of Spain.
Through this program, the MCM is evaluating the bank's supervisory system, detecting its strong and weak points and issuing advisory statements to improve the management of its finances and minimize the risk of a national banking crisis.
Corrective measures
The proposal, which is still being researched, would later give the same recommendations to all countries who received aid from them. Practically all lines of credit issued by the IMF are subject to conditions, i.e., to prior corrective measures.
In this sense, the MCM team of experts is visiting to conduct a stress test on the Bank of Spain and evaluate what aspects of the financial system need to be corrected. Risk exposure, money supply and other directives will be addressed.
