Basel Committee Reinforces Need for Proportional Credit Union Regulations
Statement on proportionality comes at the urging of WOCCU Board members
December 03, 2019
MADISON, Wis.—National-level financial regulators are being urged to tailor a set of key international standards when applying them to credit unions—a position long advocated for by World Council of Credit Unions (WOCCU) on behalf of its members.
The Basel Committee on Banking Supervision and the Basel Consultative Group (BCG) issued a joint statement supporting the use of proportionality when implementing Basel III—a set of guidelines developed to ensure internationally active banks meet minimum requirements on capital adequacy, stress testing and market-liquidity risk.
“National-level regulators tend to use the highest standards allowed by Basel III—which were designed to apply to large, international banks. To apply them in equal measure to credit unions is often either inappropriate or excessive. This joint statement reinforces the idea that the supervision of credit unions should be commensurate with the size, risk and complexity of an institution,” said Andrew Price, WOCCU VP of Advocacy.
Along with Price consistently advocating that the Basel Committee provide clearer guidance to national-level regulators, WOCCU Board Directors’ Martha Durdin (CCUA-Canada) and Michael Lawrence (COBA-Australia) joined CUNA Chief Advocacy Officer Ryan Donovan (USA) to stress the importance of proportionality in a March 2019 meeting with Basel Committee Deputy Secretary General and BCG Co-Chair Neil Esho.
“We hope all of our work will reduce the compliance burden on credit unions and other community-based depository institutions across the globe,” said Price.
World Council of Credit Unions is the global trade association and development platform 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 300+ technical assistance programs in 89 countries. Worldwide, 85,400 credit unions in 118 countries serve 274 million people. Learn more about World Council's impact around the world at www.woccu.org.