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Credit growth, problem loans and credit risk provisioning in Spain

In: Marrying the macro- and micro-prudential dimensions of financial stability

Author

Listed:
  • Santiago Fernández de Lis

    (Bank of Spain)

  • Jorge Martínez Pagés

    (Bank of Spain)

  • Jesús Saurina

    (Bank of Spain)

Abstract

This 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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Santiago Fernández de Lis & Jorge Martínez Pagés & Jesús Saurina, 2001. "Credit growth, problem loans and credit risk provisioning in Spain," BIS Papers chapters, in: Bank for International Settlements (ed.), Marrying the macro- and micro-prudential dimensions of financial stability, volume 1, pages 331-353, Bank for International Settlements.
    • Handle: RePEc:bis:bisbpc:01-16
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    More about this item

    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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