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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Macroprudential Policy, Countercyclical Bank Capital Buffers, and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments
Organization Unit
Authors
  • Steven Ongena
  • José Luis Peydró
  • Jesús Saurina
  • Gabriel Jimenez
Item Subtype Original Work
Refereed Yes
Status Published in final form
Language
  • English
Journal Title Journal of Political Economy
Publisher University of Chicago Press
Geographical Reach international
ISSN 0022-3808
Volume 125
Number 6
Page Range 2126 - 2177
Date 2017
Abstract Text To study the impact of macroprudential policy on credit supply cycles and real effects, we analyze dynamic provisioning. Introduced in Spain in 2000, revised four times, and tested in its countercyclicality during the crisis, it affected banks differentially. We find that dynamic provisioning smooths credit supply cycles and, in bad times, supports firm performance. A 1 percentage point increase in capital buffers extends credit to firms by 9 percentage points, increasing firm employment (6 percentage points) and survival (1 percentage point). Moreover, there are important compositional effects in credit supply related to risk and regulatory arbitrage by nonregulated and regulated but less affected banks.
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Digital Object Identifier 10.1086/694289
Other Identification Number merlin-id:13386
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