Presentation of the book The countercyclical provisions of the Banco de España, 2000-2016

Abstract

The first Conference on Financial Stability, jointly organized by the Banco de España and the Centro de Estudios Monetarios y Financieros (CEMFI), was held on 24 and 25 May 2017. The Conference included a panel based on the book “The Countercyclical Provisions of the Banco de España (2000-2016)” devoted to explain the experience at the Banco de España with countercyclical provisions. The Banco de España was a pioneer in developing macroprudential tools by introducing these provisions as early as in 2000. Although not able to counter the strong credit growth in the boom years, they proved effective in smoothing the loan contraction in the first years of the credit downturn and economic recession in Spain. Furthermore, the Spanish provisions were a source of inspiration for the countercyclical capital buffer agreed by the Basel Committee on Banking Supervision in 2010 and can also be considered, with some nuances along the way, the precursor of the expected-loss concept to calculate credit provisions under the IFRS 9. This article summarizes the presentation of the book in the Panel. Sitting on it were Javier Suárez as chair, Jesús Saurina Salas and Carlos Trucharte Artigas, the authors explaining the Banco de España’s countercyclical instrument and the discussants Pedro Duarte Neves and Richard Herring.