Current policy debate has renewed interest in countercyclical provisioning policies; dynamic provisions are regarded as … which would contribute to limiting procyclicality". This paper describes: i) how dynamic provisions work in a general … introducing a system of dynamic provisions that, while meeting the prudential goal of having more conservative provisioning …

and intuitive formula based on GDP growth and, secondly, by using forward-looking provisions such as the Spanish dynamic … provisions, a working macroprudential mechanism for more than a decade and a full lending cycle. …