If the Basel Committee of Banking Supervision doesn't take financial cooperatives into consideration as it ponders stricter capital requirements, it won't be for a lack of trying.
April 15, World Council of Credit Unions' Pete Crear and Dave Grace scored valuable face time with Basel Chairman Nout Wellink, telling the Netherlands Bank chairman that credit unions should not be subject to tougher capital requirements than larger institutions.
The Amsterdam meeting for WOCCU's president and vice president of association services followed three letters WOCCU had earlier sent in response to the committee's proposed rules on stress-testing procedures and capital level requirements.
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"We didn't want credit unions and financial cooperatives to pay an unfair price as part of the solution to a crisis they had no hand in making," Crear said. "Chairman Wellink was very receptive to our comments and assured us that he would bring our concerns forth to his fellow committee members."
Under Basel II guidelines, larger financial institutions may hold comparatively less capital than smaller institutions. However, WOCCU said the current financial crisis has shown larger institutions can be riskier and prone to greater systemic problems, and the group is calling for a "rebalancing" of capital requirements.
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