Basel II Addressed at CUCC Conference
May 04, 2004
Toronto, Canada—World Council of Credit Unions, Inc. (WOCCU) senior manager of trade association services, Dave Grace, addressed Canadian credit union leaders as part of a Credit Union Central of Canada (CUCC) conference break out session on upcoming Bank for International Settlements (BIS) standards. The session explained what is new in the revision to the Basel Accord on capital adequacy.
Grace explained, "There is a growing interest— out of necessity." Grace spoke on WOCCU's actions with Basel Committee and the competitive impact of Basel II on credit unions.
"One thing that's interesting is 55% of the loan portfolio for Canadian credit unions is made up of home loans. If you look at where the big banks will benefit the most from Basel II, it will be in the reductions of capital for home loans. Banks will be able to hold much less capital than credit unions, simply because we don't have all of the data."
The panel also included Phillip Moore, general manager, Greater Vancouver Community Credit Union, who gave a history of Basel in British Colombia and the potential impact in his credit union. Moore doesn't see a large reduction in capital for his credit union—rather a relocation of capital.
Leon Bloom, partner, Deloitte & Touche LLP the third panel speakers focused on the impact of Basel for banks. Leon noted that Basel deals specifically with the unexpected losses and regulated capital needed for those, but sees the economic capital to be a bigger driving force in banks pricing.
Arthur Arnold, WOCCU president and CEO noted, "The new Basel II Accord will have an impact on credit unions all over the world, including Canada. We need to prepare for those changes and what it means for credit unions."
To learn more World Council's position on Basel visit the World Council website at www.woccu.org .
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.