Building up of provisioning buffer during good times based on expected loss methodology to deal with procyclicality is another important regulatory construct under Basel III. However, the progress in this area has been very slow and it is still work in progress. As an interim measure, we propose to implement a provisioning methodology similar to the Spanish “dynamic provisioning”, shortly.
Learning from Climate Scenario Analysis in Other Countries There is a growing international consensus that climate scenario analysis is a vital tool for assessing the effects of climate-related risks on financial institutions and the financial system.