Financial conditions for large parts of the Spanish economy have improved, but those for small- and medium-size enterprises remain more challenging, the European Commission (EC) and the European Central Bank (ECB) said Monday. The EC and the ECB gave the remarks in a statement issued following the conclusion of the fifth review of the financial assistance program for Spain, which was carried out from Dec. 2 to Dec. 13. The International Monetary Fund also participated in the review, fulfilling its role as an independent monitor. Spain has pulled back from severe problems in some parts of its banking sector, thanks to its reform and policy actions, with support of the euro area and broader European initiatives, the statement said. The review group noted Spanish financial markets have further stabilized. "Following the drop in sovereign bond yields, and the rise in share prices, financing conditions for large parts of the economy have improved," the statement said. It said that the liquidity situation and the financing structure of the Spanish banking sector have further improved as bank deposits have been rising and Spanish banks are gradually benefiting from access to funding markets. The solvency position of banks has remained comfortable after the recapitalization of parts of the banking sector, the transfer of assets to SAREB (the Spanish asset management company) and overall positive earnings results over 2013 so far, the statement said. Moreover, the statement said Spain's recent legislative measures on deferred tax assets should support the solvency of the banking sector under the new EU rules on capital requirements. It noted that the process of restructuring of banks having received state aid is well underway, guided by the restructuring plans as adopted by the European Commission. "Efforts to implement the agreed measures need to continue as envisaged," the statement said. Nevertheless, the group stressed that the broader economic environment has continued to weigh on the banking sector, even though that impact has recently been receding. "The private sector needs to reduce its debt stocks going forward, as heavy debt burdens continue to weigh on lending to the private economy." With the European aid program for Spanish banks coming to an end on Jan. 23, 2014, the EC, in line with the ECB where indicated, will continue monitoring Spain's financial sector and the broader economy under all relevant EU surveillance processes, according to the statement.