Dynamic Provisioning as an Automatic Stabilizer of the Financial Instability

Svatopluk Kapounek and Vlasta Kašparovská

Society and Economy, 2016, vol. 38, issue 3, 341-358

Abstract: The pro-cyclical effect of provision is generally agreed and widely discussed in the context of the current financial crisis. The new model of the dynamic provisions applied in Spain showed countercyclical effects on the credit and business cycle. We simulate development of the dynamic provisions during the financial crisis and discuss the possible consequences. We apply a panel data model of the past credit cycle to calibrate the parameters following the same approach as in the Spanish dynamic provision. Our contribution is in the application of dynamic provisions on the banking systems for the V4 countries.

Keywords: countercyclical provisioning regime; credit cycle; macro-prudential policy (search for similar items in EconPapers)
JEL-codes: E58 G28 (search for similar items in EconPapers)
Date: 2016
Note: The results introduced in the paper have been funded with support from the Czech Science Foundation via grant No. P403/14-28848S “Financial Crisis, Depreciation and Credit Crunch in CEECs”.
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.akademiai.com/doi/pdf/10.1556/204.2016.38.3.4 (application/pdf)
subscription

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aka:soceco:v:38:y:2016:i:3:p:341-358

Ordering information: This journal article can be ordered from
Akadémiai Kiadó Zrt., P. O. Box 245, H-1519 Budapest, Hungary
https://akjournals.com/

Access Statistics for this article

Society and Economy is currently edited by Szent-Iványi, Balázs

More articles in Society and Economy from Akadémiai Kiadó, Hungary
Bibliographic data for series maintained by Kriston, Orsolya ().