by Linda Straker
- Caribbean Association of Credit Union Supervisors annual workshop opened on Monday.
- Forty-eight participants from 19 regional countries are attending
- Workshop expected to provide framework for strengthening regulation and supervision of credit union sector
“Guidance for Cyber Risk Management Oversight for Credit Union Supervisors” and “Harmonised Co-operative Act and Regulations in the ECCU” are among topics for deliberations during the annual workshop of the Caribbean Association of Credit Union Supervisors which opened in Grenada on Monday.
Taking place at the Radisson Grenada Beach Resort from 6-8 May 2019, the workshop has as its theme “Strengthening the Regulatory, Supervisory and Financial Stability Frameworks for Credit Unions in CARTAC Member Countries” and is being hosted by Grenada Authority for the Regulation of Financial Institutions and funded by the Caribbean Regional Technical Assistance Centre (CARTAC).
Forty-eight participants from 19 countries across the region are attending the workshop and during the opening ceremony was told by Oliver Joseph Minister for Trade, Planning, Industry, Cooperatives and Caricom Affairs that regulation through government intervention should not be seen as interference but enhancing the smooth operations of the financial market.
“In keeping with basic microeconomic theory that markets fail to achieve an optimum allocation of resources, this failure sends a strong signal that, while the market is the best allocator of resources there is nevertheless a role for governmental intervention, in the form of sensible financial regulation, and this regulation must be seen not as an interference with the invisible hand of the market, but as a means of enhancing the smooth operations of the market itself,” said Joseph.
“True to form without regulation, a free market will create asset bubbles as speculators would bid up the prices of stocks and commodities. When the bubbles burst, they create crises and recessions,” he added.
Justifying and explaining, some of the advantages of financial regulations where there is a new approach in financial transaction, Joseph that what financial regulation does is that it subjects financial institutions to certain requirements, restrictions and guidelines, with the primary aim of maintaining the integrity of the financial system.
“Financial regulation, therefore, protects investors and consumers from unintended economic harms, in markets where competitive forces are weak. Seen in this way, financial regulation promotes financial stability and ensures that markets remain orderly,” he said.
Explaining that effective regulation can be broken down into the two basic categories of safety-and-soundness regulation and compliance Joseph said that regulations must not be seen as inhibiting the free flow of the market nor as helping to dampen economic growth.
“Typically, financial regulation should apply to any limits on interest rates that can be charged on loans or paid on deposits; limits on fees for other financial services; limits on entry by domestic or foreign enterprises; limits on the establishment of branch locations by incumbents; limits on the fields and activities into which financial institutions can enter; and requirements that financial institutions provide services to specific industry sectors and/or specific geographic areas,” he said.
The workshop is expected to provide a framework for strengthening regulation and supervision of the credit union sector throughout the region.
