MONTREAL (6/21/13)--Desjardins Group, the largest Canadian credit union, has been deemed too big to fail by the Quebec Financial Markets Authority.
By labeling Desjardins Group as a "systemically important institution," the Quebec authority placed it in the same class as the Big Six banks in Canada (National Post June 20).
Systemically important institutions are financial companies considered to be so big and interconnected that if they failed, it would be a threat to the financial system, according to International Basel financial rules, the Post said.
Such institutions are required to hold a more substantial capital cushion than their peers as a means to handle losses if they get into financial difficulty, under the Basel rules.
At the end of last year, Desjardins Group, which is a network of caisses populaires (credit unions) based in Levis, Quebec, had assets of $196.7 billion--making it the biggest financial group in the province of Quebec, the Post said.
Desjardins has been expanding its reach from Quebec to other provinces during the past few years. For example, it acquired Western Financial, a bank and insurance company based in Alberta, in 2010 (News Now Feb. 6).
In February, Desjardins accumulated a substantial minority stake in Qtrade Financial, a discount brokerage firm with business spanning from Ontario to the west coast of Canada. The move expanded the cooperative's online trading services outside Quebec to complement its discount brokerage, Disnat (The Globe and Mail Feb. 5).