Credit Growth, Problem Loans and Credit Risk Provisioning in Spain

Santiago Fernández de Lis, Jorge Martínez Pagés and Jesús Saurina ()
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Santiago Fernández de Lis: Banco de España
Jorge Martínez Pagés: Banco de España

No 18, Working Papers from Banco de España

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.

Keywords: banks; behaviour; credit; risk (search for similar items in EconPapers)
JEL-codes: E5 E51 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (79)

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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/00/Fic/dt0018e.pdf First version, 2000 (application/pdf)

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Chapter: Credit growth, problem loans and credit risk provisioning in Spain (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0018

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