WASHINGTON (3/22/12)--World Council of Credit Unions (WOCCU) submitted formal support Tuesday for proposed revisions to the Basel Committee on Banking Supervision's Core Principles for Effective Banking Supervision.
The revisions would make regulatory standards "proportional" to financial institutions' risk profiles and based on their impact on global financial systems. Supervisory proportionality would help reduce unnecessary regulatory burdens on smaller institutions, WOCCU said in a Tuesday letter to the committee's headquarters in Basel, Switzerland.
"World Council supports the committee's proposed revisions to its core principles vis-à-vis banking supervision," wrote Michael Edwards, WOCCU chief counsel and vice president for advocacy and governmental affairs. "We believe the proportionality concept will help reduce unnecessary regulatory burdens on credit unions and other small financial institutions that are non-complex and do not present systemic risks to the financial system."
Proper oversight is critical to credit unions' capabilities to effectively serve their members, especially during times of economic challenge, according to Brian Branch, WOCCU president/CEO. "We support the regulatory goals outlined by the Basel Committee and we appreciate the opportunity to represent the global credit union movement in helping the committee develop a proportionality of oversight appropriate to our movement," Branch said.
In his letter to Wayne Byres, Basel Committee general secretary, Edwards expressed WOCCU's support of the proportionality concept as outlined in principle 8 ("Supervisory approach"), principle 9 ("Supervisory techniques and tools") and elsewhere in the revisions. Edwards also stressed recommendations offered in Guiding Principles for Effective Prudential Supervision of Cooperative Financial Institutions, developed in 2011 by the International Credit Union Regulators' Network (ICURN), a worldwide network of credit union regulatory authorities. WOCCU serves as ICURN's secretariat.
ICURN developed its principles based on those set forth by the Basel Committee, but tailored them to a credit union and cooperative financial institution context. "World Council believes that the ICURN guiding principles are an appropriate proportional approach to supervision of credit unions," Edwards wrote.
To see a copy of the letter, use the link.