One more step
As many of you are aware, WOCCU advocates strongly for proportionality to be included in every international standard so that rulebooks can be tailored appropriately for credit unions and that our operating model is adequately considered. This year, the G20 is being led by the Italian Presidency and will focus, in part, on issues of financial inclusion. I hope that they are able to make the connection between proportionality and the importance of it to smaller financial institutions. Proper implementation of proportionality in regulations for smaller cooperative depository institutions such as credit unions can greatly reduce inequalities and promote inclusive growth. More importantly, proportionality, if applied appropriately, can significantly advance the G20’s goals of promoting financial inclusion by fostering responsible finance through increased access to responsible and affordable financial services.
To that end, it was heartening to see the comments of Ignazio Visco, the Governor of the Bank of Italy, who gave a keynote address to the 2021 IIF G20 Conference-The G20 Agenda Under the Italian Presidency. In his address, Mr. Visco commented on financial inclusion noting that the shift to digital financial services deserves close attention since it offers new opportunities but, if not carefully governed, could also generate undesirable consequences. Not only may it lead to new forms of exclusion, making access to finance more unequal, but it may also favor irresponsible financial behavior, such as over-indebtedness. He noted that ensuring that the benefits of digitalization are widely shared (and thus financially inclusive) will depend largely on the accessibility of digital infrastructures, the degree of financial and digital literacy, and the adequacy of governance, especially in the fields of regulation and supervision.
These statements are encouraging, and I expect to see similar language in the G20 Leaders’ Declaration in October. I anxiously await to see if they can take it one more step and make the connection between proportionality, financial inclusion and, more importantly, the critical role that credit unions can play.
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