Dynamic provisioning on the agenda for European banks

European banks may be required to hold counter-cyclical buffers that can be drawn down in periods of stress, similar to the dynamic provisioning model used by Spanish banks, according to sources at the European Commission (EC).

The EC is considering how best to introduce buffers, along with a range of other measures, including leverage ratios, further guidelines on managing liquidity risk and the possible removal of all options and discretions for national regulators. These issues will form a