Basel Committee Hears From CUs
FRANKFURT, Germany-Smaller financial firms, including the world's credit unions, did better than their larger counterparts during the recent economic crisis, but attempts to strengthen global financial regulations by closing loopholes in existing laws could unintentionally cause problems for those firms, according to WOCCU. The group sent a delegation with that message to attendees at a Basel Committee on Banking Supervision meeting here. WOCCU was one of five organizations summoned by the Basel Committee-and the only one representing credit unions-to discuss the committee's current capital and liquidity proposals.
According to WOCCU, the proposed standards make increased credit union access to central bank liquidity, capital sources, deposit insurance and payment systems even more critical in helping financial cooperatives avoid facing unintentional restrictions in serving members.
WOCCU reported from the meeting that Basel Committee members, led by Chair Nout Wellink, acknowledged the severity of the proposed changes, estimating that current proposals could reduce the global GDP by .5%-1% due to the proposed leveraging restrictions on financial institutions.