News
Credit unions 'must be financially sound'
23 July 2010 at 15:54
The Financial Services Authority (FSA) intends to make sure credit unions are financially sound and well managed with fewer failures and defaults, the regulator has stated.
Paul Sharma, director of the prudential policy division at the FSA, said it is publishing near-final rules now so that credit unions have enough time to be able to meet the stronger prudential requirements, and to prepare for future government legislative changes.
The FSA has made several changes in the new Credit Union sourcebook, including requiring that all credit unions hold liquid assets of at least five per cent of total relevant liabilities but not below per cent in two consecutive quarters, which is the current requirement for smaller unions but a slight increase for larger ones.
"Our reforms focus on improving the areas of weakness that we still see in the credit union sector, by raising requirements for capital, liquidity and financial reporting," Mr Sharma said.
Recently, Alexander Justham, director of markets at the regulator, said it is "determined" to ensure that everyone involved in the sector meets FSA compliance standards as it looks to ensure the area is "clean" and "efficient".
Posted by James Harrison 