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We investigate the effect of an exogenous change in loan loss provisioning rules on bank risk taking. To identify the effect we exploit that only banks that revealed a high conditional accounting conservatism (CAC) in the pre-adoption period should respond to the change. We conduct a difference-in-differences analysis using a large sample of matched bank-firm data around the introduction of the dynamic loan loss provisions in Spain in 2000. The main result is that banks with a high CAC in thedoi:10.2139/ssrn.2022644 fatcat:rpchgtipivgdjixwneuyidxlxu