The countercyclical provisions of the Banco de España, 2000-2016

Artículo de revistaThis article contains the discussion made by Pedro Duarte Neves at the first Conference on Financial Stability, jointly organized by the Banco de España and the Centro de Estudios Monetarios y Financieros (CEMFI), on 24 and 25 May 2017. After the presentation provided in the panel based on the book The Countercyclical Provisions of the Banco de España (2000-2016), the author started his intervention by addressing the comparison between the key features of the Spanish countercyclical provisions, the countercyclical capital buffer and the new provisioning framework, IFRS 9. The most important message is that countercyclical provisions anticipated the purpose and the key characteristics of those more recent instruments. Then the author emphasized the aspects that, in his opinion, could not have been achieved by the use of the Spanish countercyclical provisions, discussed its design and its smoothing role in the recent financial crisis and, finally, concluded that they constituted a remarkable contribution to the regulatory and supervisory community

Consumer Expenditure and Cointegration

In this paper we estimate the Almost Ideal Demand System (AIDS) for the Portuguese economy. The budget shares and real per capita income are found to be integrated of order one, I(1), but prices seem to be better classified as I(2). This raises new problems, as it is not possible to test for homogeneity and symmetry in a straightforward way. As cointegration is not rejected after the imposition of homogeneity and symmetry restrictions, we conclude that the AIDS is an acceptable characterisation of the Portuguese data on consumer expenditure.

Stylised Features of Price Setting Behaviour in Portugal: 1992-2001

This paper identifies the empirical stylized features of price setting behaviour in Portugal using the micro-datasets underlying the consumer and the producer price indexes. The main conclusions are the following: 1 in every 4 prices change each month; there is a considerable degree of heterogeneity in price setting practices; consumer prices of goods change more often than consumer prices of services; producer prices of consumption goods vary more often than producer prices of intermediate goods; for comparable commodities, consumer prices change more often than producer prices; price reductions are common, as they account for around 40 per cent of total price changes; price changes are, in general, sizeable; finally, the price setting patterns at the consumer level seem to depend on the level of inflation as well as on the type of outlet.