Credit Growth, Problem Loans and Credit Risk Provisioning in Spain
AbstractThis paper analyses the cyclical behaviour of bank credit, loan losses and provisions for loan losses in Spain. These three variables are strongly cyclical in Spain -as in many other countries- and this poses some problems to bank supervisors and regulators. In a context of strong competitive pressures, there is a tendency for loose bank credit conditions in an upturn in view of the low level of contemporaneous non-performing loans. This may contribute to an over-extension of credit.The paper explains in detail the rationale and expected effects of the new loan loss provision the so-called statistical provision- introduced recently by the Banco de España and aimed at an appropriate recording and recognition of expected losses.
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Bibliographic InfoPaper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0018.
Length: 34 pages
Date of creation: 2000
Date of revision:
banks; behaviour; credit; risk;
Find related papers by JEL classification:
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
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