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

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...

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Bibliographic Details
Main Author: Chan-Lau, Jorge
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2012.
Series:IMF Working Papers; Working Paper ; No. 2012/124
Online Access:Full text available on IMF
Description
Summary: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.
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Physical Description:1 online resource (21 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students