A panel of 186 European banks is used for the period 1992-2004 to determine if banking be-haviors, induced by the capital adequacy constraint and the provisioning system, amplify credit uctuations. We …nd that poorly capitalized banks are constrained to expand credit. We also …nd that loan loss provisions (LLP) made in order to cover expected future loan losses (non discretionary LLP) amplify credit uctuations. By contrast, LLP used for management objectives (discretionary LLP) do not a¤ect credit uctuations. The …ndings of our research are consistent with the call for the implementation of a dynamic provisioning system in Europe. JEL classi…cation: G21