Spain

This technical note analyzes selected issues related to four areas of the legal system for insolvency and creditor rights with a particular relevance for financial stability and the resolution of legacy assets. These are specifically, creditor/debtor rights, corporate workouts/outof- court regimes, the legal framework for insolvency, and institutional frameworks. The regime for creditor/debtor rights is largely in line with international best practices. With respect to creditor/debtor rights, the registration of real estate mortgages is efficient, reliable and cost effective; due to nonperforming loans (NPLs), real estate foreclosure has been extensively used in Spain. Real estate collateral plays a critical role in Spain due to the fact that a very large percentage of loans are collateralized with real estate. Stakeholders however reported that the duration of foreclosure has increased to around 24 months recently due to various facts jeopardizing the prompt realization of the collateral. Spain also has a register for security rights over movable assets which is computerized and efficient; due to the focus on financial collateral it is limited to such purpose. The enforcement on movable assets is reportedly somewhat lengthy.