BASEL, Switzerland — Credit unions worldwide have weathered the global financial crisis better than their larger, for-profit counterparts and, in many countries, have helped stabilize and counter-balance inherent weaknesses in the financial services systems. Those were some of the important messages a World Council of Credit Unions (WOCCU) delegation raised on March 29 in a series of three meetings with members of the Basel Committee on Banking Supervision and the Financial Stability Board to address pending revisions to the Basel II capital accord.
"Over the past decade, the Basel Committee's capital rules affecting banks and credit unions have been adopted by financial regulators in more than 100 countries," said Dave Grace, WOCCU vice president of association services who led the multi-national delegation. "It is imperative that the Basel Committee's guidance not only does no harm to financial cooperatives, but that it actively promotes the diversity and benefit those cooperatives bring to the marketplace."
Grace's delegation, which included WOCCU Second Vice-Chair Grzegorz Bierecki, president and CEO of Poland's National Association of Co-operative Savings & Credit Unions, and David Phillips, president and CEO of Credit Union Central of Canada, met with Basel Committee and Financial Stability Board officials to discuss capital and liquidity standards and other issues that affect credit unions. In the interest of promoting proper oversight of financial cooperatives, the delegation raised specific issues regarding credit unions' capital structure and governance policies, as well as credit union reactions to the financial crisis of which Basel officials were not aware.
WOCCU has been advocating with the Basel Committee for recognition of the credit union difference for the past several years. The current consultative documents, adapted with guidance from the Group of 20 (G-20) nations in response to the global economic meltdown, recognize for the first time the difference between large for-profit financial corporations and non-joint stock companies, which includes mutuals, cooperatives and credit unions. Input from credit unions on the issues raised during the delegation's meeting is critical to ensure that those standards appear in the final guidelines, delegation officials said.
To follow up the meetings, WOCCU will host a webinar on April 7 for WOCCU member organizations and regulators with participation from the Basel Committee's staff. Comments from both the visit and webinar will be incorporated into a formal letter WOCCU will submit in response to the Basel Committee's consultative documents on behalf of the global credit union movement. The deadline to submit comments in response to the current consultative documents is April 16.
"WOCCU continues to be the voice of the international credit union community," said Bierecki. "I am pleased that what we have to say is being heard by people in positions to make a difference."
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, 57,000 credit unions in 105 countries serve 217 million people. Learn more about World Council's impact around the world at www.woccu.org.