Report
324
Number
Feb 13 2014

Credit Union Capital Adequacy: What's New and What's Next?

Credit unions’ long-standing inability to access alternative capital impairs their stability during times of stress and their ability to grow in both good and bad times. Michael Andrews outlines the mismatch between credit unions and investor-owned banks, with special attention to the implications of Basel III capital guidelines, prompt corrective action (PCA), and the challenges of maintaining member ownership in the face of outside capital. 

The timing is right for policymakers to place an emphasis on updating capital adequacy standards to ensure the prudent management and wellbeing of North American credit unions. The financial crisis of 2007 proved that having enough capital can ensure the continuation of a safe and efficient marketplace.

Andrews explores the ramifications of existing regulations related to alternative capital and treatment for credit unions. 

Filene thanks our generous supporters for making this important research possible.

Report Number 324