MercoPress. South Atlantic News Agency

IMF praises Spain’s efforts to reform economy and publish banks ‘stress tests’

Caroline Atkinson, the IMF director of external relations

The International Monetary Fund welcomed the results of a Spanish bond auction and said decisions by Spain and Germany to publish results of stress tests on banks will boost financial market confidence.

“Clearly the Spanish auction is considered to have gone rather well,” said Caroline Atkinson, the IMF’s director of external relations, at a press briefing Thursday in Washington. “Also, we do view the decision in Spain, and Germany as well, on publishing stress tests as very positive.”

She said “uncertainty” is one of the biggest issues affecting confidence in financial systems, and the publication of bank stress-test results “can be very helpful” by giving investors more information.

Atkinson also said there is “no truth” to rumors that Spain is seeking an IMF loan, and she also said she was not aware of any preliminary discussions that might lead to such a request. She said the IMF supports Spain’s efforts to rein in its budget deficit.

“We believe that the targets that they have announced are fully appropriate,” Atkinson said.

While financial risk is a drag on Europe’s economy, a weaker Euro has been a “positive” for the region, Atkinson said. She said the IMF plans to update its World Economic Outlook on July 8 in Hong Kong, as the global economy strengthens and downside risks remain.