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

Abstract

This article contains the discussion made by Pedro Duarte Neves at the first Conference on Financial Stability, jointly organized by the Banco de España and the Centro de Estudios Monetarios y Financieros (CEMFI), on 24 and 25 May 2017. After the presentation provided in the panel based on the book The Countercyclical Provisions of the Banco de España (2000-2016), the author started his intervention by addressing the comparison between the key features of the Spanish countercyclical provisions, the countercyclical capital buffer and the new provisioning framework, IFRS 9. The most important message is that countercyclical provisions anticipated the purpose and the key characteristics of those more recent instruments. Then the author emphasized the aspects that, in his opinion, could not have been achieved by the use of the Spanish countercyclical provisions, discussed its design and its smoothing role in the recent financial crisis and, finally, concluded that they constituted a remarkable contribution to the regulatory and supervisory community.