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Matz notes FSOC actions key to CUs
April 29, 2013 – Interest rate risk, capital and liquidity, and operational risk are addressed in the annual report released last week by the Financial Stability Oversight Council, and NCUA Chairman Debbie Matz is encouraging credit unions to take heed.
"As the supervisor and insurer of the credit union system, NCUA takes these recommendations and the analysis of emerging risks very seriously," Matz said. "A number of the risks identified and recommendations are consistent with our regulatory and supervisory priorities, and the report reinforces and reaffirms the critical nature of these priorities."
She added, "Every recommendation in this report is meaningful to the credit union industry; because financial stability and a healthy, growing economy are critical to the success of the industry."
The FSOC's report includes recommendations for helping to ensure financial stability and mitigate systemic risk, she said. In the three identified by Matz, the council:
- recommends that regulatory agencies continue their scrutiny of how potential changes in interest rates could adversely affect risk profiles, and this is a priority for NCUA;
- emphasizes that capital and liquidity buffers "form the most fundamental protection for the broader financial system" (Matz says standards are continually evaluated "to make sure they are appropriate for a growing and evolving credit union industry");
- states that operational risks, including cybersecurity risks, are an emerging and rapidly changing threat.
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