International regulators respond to WOCCU call for COVID-19 flexibility

International standard-setting bodies concerned with the impact of the coronavirus (COVID-19) pandemic on the global banking system are all responding with guidance to assist credit unions in providing critical financial services during the crisis. World Council of Credit Unions called for regulatory flexibility early on to help credit unions meet the financial needs of their members during the crisis.

The following international standard-setting bodies have released revised guidelines and directives.

1. Basel Committee on Banking Supervision:

1. The Basel Committee's oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), provided relief to help financial institutions respond to the impact of COVID-19 on the global banking system by delaying deadlines for the implementation of the Basel III framework.
2. The Basel Committee issued a statement noting that member jurisdictions can pursue a range of regulatory and supervisory measures to alleviate the financial stability impact of COVID-19, making it clear the supervisory authorities have flexibility to pursue further measures if needed.

2. Financial Stability Board:

The FSB issued a statement encouraging authorities and financial institutions to make use of the flexibility within existing international standards to provide continued access to funding for market participants, and for businesses and households facing temporary difficulties from COVID-19. The FSB is also seeking to ensure that capital and liquidity resources in the financial system are available where they are needed.

3. IFRS Foundation:

The IFRS Foundation published guidance to address IFRS 9 application questions during this pandemic. The document outlines applicable accounting standards related to expected credit losses (ECL) that may arise during the COVID-19 pandemic and provides for favourable treatment of “payment holidays” extended during the crisis.

“We are pleased to see the international standard-setting bodies utilizing their tools to provide much-needed flexibility and guidance so our credit unions can continue to serve the needs of their members. The guidance issued provides the basis for national-level regulators to likewise implement conforming accommodations,” said WOCCU’s Andrew T. Price, Vice President of Advocacy.

WOCCU called for flexibility by all regulators to provide prudent adaptability during the crisis, noting that they provide much-needed stability and essential services during market hardships.