Research On The Using Of Dynamic Provsioning Under Macro-prudential Regulation Around World

Along with the rapid development of financial market, the contact between thefinancial sector and real economy is more and more closer. Especially since thesubprime crisis in2007broke in the United States, how to maintain financial marketstability better became a hot topic in academic field. In this process,as a bottom-upsupervision idea, the traditional micro-prudential naturally ignored the correlationbetween individuals in the financial market and the whole system, which got a birthdefect in coping with systemic risk. So the macro-prudential regulation as a top-downregulation concept arose at the historic moment. And dynamic provisioning tools wasan important part of macro-prudential regulation tools framework, whose significancewas to reduce pro-cyclical in traditional provisioning system itself. This article was acomparative study on our country’s dynamic provisioning system and the internationalexperience, and accordingly put forward relevant policy suggestions.Firstly, this paper introduced the Spain, Colombia, Peru and India’s experience ofapplication of the dynamic provisioning system and did some comparison andevaluation. Secondly, this paper systemized the institution in our country before andafter introducing the dynamic provisioning system and evaluated the effect of thedynamic provisioning on financial sector. Finally, the dynamic provisioning system inChina was compared with international experience, on the basis of which suggestionsof improving dynamic provisioning system in China were given.Based on the comparison, the author put forward the following four policysuggestions of the dynamic provisioning system in our country: First, set provisioningceiling, which can refer to Spain’s experience that risk estimate is multiplied by a fixedcoefficient as a provisioning ceiling to introduce; Second, standardizing the use ofdiscretion must clear the purpose of dynamic provisioning policy, perfect our country’srelevant data structure, and draw lessons from the practice of Colombia and Peru toclear the timing and related manners of discretion entering and exiting; Third, solvingthe asymmetry of general provisioning can draw lessons from Spain’s dynamicprovisioning system which reduced the volatility of the asset impairment provision byallowing the amount of general provisioning to be minus when crisis;Fourth,improving the non-credit related general provisioning, as a preparation for the firstneed, need to set up the credit grading system for non-credit related assets to ensurenon-credit related general provisioning works accordingly.