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The Spanish Approach:Dynamic Provisioning and other Tools


  • Santiago Fernandez de Lis
  • Alicia Garcia-Herrero


The financial crisis of 2007 and 2008 has drawn the attention of regulators and market participants to the severe consequences of procyclicality in the financial system. While this had already been a concern during preparations for the introduction of Basel II, it seems that much still needs to be done. The Bank of Spain, as regulator of the Spanish banking system, has approached the issue its own way, well before the discussions for the introduction of Basel II started. Several tools have been developed, the most well-known of which is dynamic provisioning. Another tool which we shall briefly review is the treatment of securitisation by the Spanish regulator. Both issues will be developed in this chapter so as to draw some lessons for other countries interested in reducing the pro-cyclicality of their financial system.

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  • Santiago Fernandez de Lis & Alicia Garcia-Herrero, 2009. "The Spanish Approach:Dynamic Provisioning and other Tools," Working Papers 0903, BBVA Bank, Economic Research Department.
  • Handle: RePEc:bbv:wpaper:0903

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    Cited by:

    1. Pradeep Mitra & Marcelo Selowsky & Juan Zalduendo, 2010. "Turmoil at Twenty : Recession, Recovery, and Reform in Central and Eastern Europe and the Former Soviet Union," World Bank Publications, The World Bank, number 2682.
    2. Sum Katarzyna, 2015. "Basic Indicators of Systemic Risk in the EU Banking Sector. Implications for Banking Regulation," International Journal of Management and Economics, De Gruyter Open, vol. 47(1), pages 36-55, September.
    3. LaGarda, Guillermo & Manzano, Osmel & Prat, Jordi, 2015. "The Legacy of the Crisis: Policy Options in a Favorable Environment," MPRA Paper 72151, University Library of Munich, Germany.

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