Carlos E. Cuevas

Klaus Peter Fischer

Co-operative financial institutions (CFIs) include diverse member-owned financial intermediaries referred to as credit unions, savings and credit cooperatives, co-operative banks, and other terms that differ across regions of the world. Their institutional structure and governance, legal and regulatory status, and scale and services portfolio also vary widely across regions and especially between industrialised countries and developing economies. A most basic common denominator is that they collect deposits and do business often solely with members. This paper addresses topics on which an agreement in necessary to arrive at consensus guidelines or principles of regulation and supervision of cooperative financial institutions (CFIs) in developing countries. Three main topics covered are: (i) the fundamental structure of the sector in terms of its internal (micro) and inter-CFI (macro) organisation, with a focus on the agency conflicts inherent in the mutual structure, the extent to which they contribute to failure risk, and whether and how these conflicts are controlled by existing governance mechanisms; (ii) the existing legal frameworks in an international context, their origins, and the implications for the functioning of CFIs; and (iii) the regulatory frameworks under which CFIs operate and the different propositions by stakeholders about what should be an appropriate regulatory framework and an effective supervision mechanism.

Issues in Governance, Regulation, and Supervision

Cooperative Financial Institutions

A thorough inquiry into the distinctive features of cooperative financial institutions that should inform an appropriate legal, regulatory and supervisory framework.

Christopher Baker

Michael O'Donnell

Beatriz Marulanda

Jacques Trigo Loubière

Síncrito Cifuentes

Robert Peck Christen

Glenn D. Westley

Jeffrey Poyo

Lee Arbuckle

Carlos Heller

Alejandro Vargas Durán

Dale W. Adams

Brian Branch

Helmut Pabst

Sherrill Shaffer

David C. Richardson

Policymakers in Latin America increasingly are turning to policies that have high economic rates of return and a favorable impact on income distribution. By providing financial services to small businesses and poor households -which normally lack such services- credit unions help secure growth with equity. The challenges faced by Latin America's credit unions today are likely to force them to further modernize and consolidate, fine tune their inherent advantages, improve mechanisms for prudential regulation, and find ways to increase their share of low and middle-income markets. Safe Money presents the new thinking on how credit unions can compete effectively in modern financial markets while still retaining their social mission.

Building Effective Credit Unions in Latin America

Safe Money

Carlos E. Cuevas

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