Do Dynamic Provisions Enhance Bank Solvency and Reduce Credit Procyclicality? A Study of the Chilean Banking System

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Price:  $18.00

Author/Editor: Jorge A. Chan-Lau
Release Date: © May, 2012
ISBN : 978-1-47550-353-1
Stock #: WPIEA2012124
Stock Status: On back-order

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Dynamic provisions could help to enhance the solvency of individual banks and reduce procyclicality. Accomplishing these objectives depends on country-specific features of the banking system, business practices, and the calibration of the dynamic provisions scheme. In the case of Chile, a simulation analysis suggests Spanish dynamic provisions would improve banks' resilience to adverse shocks but would not reduce procyclicality. To address the latter, other countercyclical measures should be considered.


Business cycles , Economic development

More publications in this series: Working Papers

More publications by: Jorge A. Chan-Lau