Inner City Press: Investigative Reporting from the United Nations

IMF's Spain Report Says Banks Can't Sell Off Foreclosures Fast Enough

By Matthew Russell Lee

UNITED NATIONS, February 20 -- What's an impediment to Spain's "financial reforms," according to an International Monetary Fund report under embargo until 10 am today? They can't sell of foreclosed assets fast enough. The IMF report says, at page 44:

"the liquidation of foreclosed assets in 2013 has been below
expectations due to worse-than-expected liquidity and prices in the real estate market, slow implementation of SAREB’s commercial strategies, and a difficult start for the servicing arrangements."

So the banks are foreclosing on and repossessing "assets," but then can't flip them fast enough. Which banks? The IMF's last annual report on Spain, released last August, ran some 66 page but mentioned Bankia only three times, all of them in financial tables.

But as Inner City Press asked the IMF at its briefing on July 11, Managing Director Christine Lagarde was on the witness list of the Spanish political partyUnion, Progress & Democracy, which alleged fraud in the weakening and bail out of the bank.

The IMF answered Inner City Press' questions from that day on Sri Lanka, and more recently on South Sudan.

On Sri Lanka: "The one on Mr. Singh is accurate. The Island and Daily Mirror coverage of Mr. Mathai's talk was much better in our view and may be helpful to you."

From the IMF's transcript of Inner City Press' question:

I have a question on South Sudan. We'll jump to Africa. I think we'll move off Europe for awhile. On South Sudan:

“How does the IMF view the recent firing of the vice president and ministers and non-passage of the petroleum act? What impact may this have?”

Thanks for that question. The effects on both countries, both South Sudan and Sudan, are likely to be quite severe, given the rundown of their reserve buffers since 2011, and a progressive build up of economic and social tensions. We can't give you a precise analysis of what these firings mean in terms of the severity of the economic dislocations in South Sudan and Sudan, but we basically hope that both countries will implement their recent agreements, given their importance for regional peace and economic stability. We also think that implementing these agreements will help relieve the economic pressures that have been building up since oil was shut down there in January of 2012.

And on the even worse problems in South Sudan this year? Inner City Press asked the IMF two week ago - but still no answer.

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