On balloons and credit unions
Many of us were fascinated by the balloon from China that recently floated over the United States and was then shot down over the ocean. The one useful educational piece of this event is that it focused many of us on how governments interact with each other, how diplomatic relations work and how nations deal with conflict.
What many people don’t realize is that there is a long history of conflict between nations in the area of financial services as well. But even more important is the extensive cooperation and work that goes on globally in this area, which has a profound influence on how credit unions operate.
The G20, comprised of 19 nations and the European Union, typically meets every year. The G20 Presidency is led by India this year, with the final summit set to occur in September. The G20 is where the world comes together to agree on various policy actions. What many people do not realize is that there is much work conducted all year leading up to the summit. Many of the respective finance ministers participate in various working groups and finance tracks, where they work on issues related to financial regulation.
Ultimately, where there is consensus, the G20 Leaders’ Declaration will give direction to the international standard setting bodies, such as the Basel Committee on Banking Supervision, the Financial Action Task Force, the International Accounting Standards Board, the Financial Stability Board and others. This is of key importance, as these bodies set international standards for financial regulations that many countries will use to model their own laws. Many countries want to abide by these standards due to international pressure to do so, but also, because many of them have participated in their development.
This is why World Council of Credit Unions (WOCCU) focuses its work on not only the international standard setting bodies, but also the G20, to make sure that credit unions and the credit union member-owned cooperative model is considered and advanced when these institutions set financial regulations. WOCCU’s recently released 2023 Global Regulatory Update focuses on many of the issues forthcoming for credit unions on the global stage. Financial inclusion, sustainable finance, payments, cybersecurity and anti-money laundering (AML or the Bank Secrecy Act) are all areas of change that will affect credit unions going forward.
This year, it is imperative that the credit union difference is integral to the rebuilding that is to follow the pandemic and a likely global economic recession. Our unique credit union model should and needs to play an important role in improving the financial wellbeing of everyone around the world. Please take a look at the issues highlighted in this year’s report to get insights into the regulations coming your way. It is a great opportunity to help you fully appreciate why international advocacy matters.
