TY - UNPB
T1 - Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply
T2 - Evidence from the Spanish Dynamic Provisioning Experiments
AU - Jiménez, G.
AU - Ongena, S.
AU - Peydro, J.L.
AU - Saurina, J.
N1 - This is also CentER Discussion Paper 2012-036
Pagination: 57
PY - 2012
Y1 - 2012
N2 - Abstract: We analyze the impact of the countercyclical capital buffers held by banks on the supply of credit to firms and their subsequent performance. Countercyclical ‘dynamic’ provisioning that is unrelated to specific loan losses was introduced in Spain in 2000, and modified in 2005 and 2008. These policy experiments which entailed bank-specific shocks to capital buffers, combined with the financial crisis that shocked banks according to their available pre-crisis buffers, underpin our identification strategy. Our estimates from comprehensive bank-, firm-, loan-, and loan application-level data suggest that countercyclical capital buffers help smooth credit supply cycles and in bad times have positive effects on firm credit availability, assets, employment and survival. Our findings therefore hold important implications for theory and macroprudential policy.
AB - Abstract: We analyze the impact of the countercyclical capital buffers held by banks on the supply of credit to firms and their subsequent performance. Countercyclical ‘dynamic’ provisioning that is unrelated to specific loan losses was introduced in Spain in 2000, and modified in 2005 and 2008. These policy experiments which entailed bank-specific shocks to capital buffers, combined with the financial crisis that shocked banks according to their available pre-crisis buffers, underpin our identification strategy. Our estimates from comprehensive bank-, firm-, loan-, and loan application-level data suggest that countercyclical capital buffers help smooth credit supply cycles and in bad times have positive effects on firm credit availability, assets, employment and survival. Our findings therefore hold important implications for theory and macroprudential policy.
KW - bank capital
KW - dynamic provisioning
KW - credit availability
KW - financial crisis
M3 - Discussion paper
VL - 2012-011
T3 - EBC Discussion Paper
BT - Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply
PB - EBC
CY - Tilburg
ER -