February 23, 2016
The Alphonse and Dorimène Desjardins International Institute for Cooperatives held its first governing council meeting in Montreal, chaired by Mrs. Monique Leroux. Professor Rym Ayadi presented the main objectives and achievements since the official launch of the Institute on 11 October 2014 at the International Summit of Cooperatives in Quebec, Canada.
All members of the Board welcomed the Institute’s initiative as an independent international research institute dedicated to promoting research into and understanding and dissemination of financial cooperatives within national and global financial systems, given their changing role resulting from the post crisis regulatory era and challenging global macro-economic conditions.
In this context, they discussed current trends. The main points were as follows:
First, the post financial and economic crises raise fundamental questions about the future of Europe; how to deal with the refugee crisis, the potential exit of Britain from the EU, the persistence of the accommodating monetary policy led by the European Central Bank and the subsequent low to negative interest environment, and the potential detrimental effects of post-financial crisis regulation on cooperative banks’ performance. These new challenging and highly uncertain conditions create a need for further studies, in order to fully understand their combined impact on banking business in general and financial cooperatives in particular.
Secondly, the digitalization era and the growing influence of e-commerce lead to new types of financial services, like online financial credit platforms and crowdfunding. These new challenges and opportunities enhance understanding of how those who are active in the financial system can respond in ever changing and more competitive markets.
Finally, to further the understanding of the cooperative business model in finance worldwide, in order to support global regulators in designing more optimal regulation that improves the current one-size-fits –all approach. More granular data (quantitative and governance structures) is needed to allow the development of better scientific and policy evidence and arguments and to contribute to the creation of a more effective global regulatory framework that takes into account the specificities of cooperative structures and governance.
In conclusion, the chair emphasized the role of the Institute in providing more detailed research to better understand the business models of financial cooperatives and hence to support policy makers in formulating the appropriate regulatory framework to ensure financial stability. Several challenges must be understood, researched and assessed.