determinants of loan loss provision (LLP), which are classified as either discretionary (income smoothing, capital management …

, hence credit risk, in Eurozone. Non Performing Loans, Loan Loss Provisions and Loan Loss Reserves are used as proxies for …

, inflation, the short-term interest rate, bank lending, as well as loan loss provisioning by banks (as proxy for credit risk …). Our main findings are that: (i) bank lending and loan loss provisioning are important drivers of business cycle … fluctuations, (ii) loan loss provisioning decreases in relative terms as bank lending increases, and (iii) bank lending is …