Bouvatier, Vincent; Lepetit, Laetitia - In: Journal of Financial Stability 8 (2012) 1, pp. 25-31
market fluctuations. We show that a backward-looking provisioning system amplifies the pro-cyclicality of loan market … evolution of total loan loss provisions, the issue of pro-cyclicality of loan market fluctuations does not exist. Our results …This paper develops a partial equilibrium model of a banking firm to analyze how provisioning rules influence loan …