Provisioning for the future

A growing number of regulators have highlighted dynamic provisioning as a means of lessening pro-cyclicality in the financial system. José Mar√≠a Rold√°n, director-general of banking regulation at the Banco de Espa√±a and chair of the Standards Implementation Group of the Basel Committee on Banking Supervision, talks to Joel Clark about Spain's approach and the need for an overhaul of loan loss provision rules

The Spanish financial system has come under intense scrutiny in recent months, as global supervisors look to understand why the country's top banks appear to have navigated the financial crisis in better shape than many of their competitors in Europe. While other financial institutions reported a succession of eye-catching losses for 2008, Spain's top two banks bucked the trend, with Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA) reporting profits of EUR8.88 billion and EUR5.39