risks from a commercial firm to its bank : i ) first, by limiting related - party transactions between the bank and its commercial firm owner and requiring that their relations are conducted at market prices, ii ) second, by aligning the incentives of banks ’ board members and managers. for example by requiring that the majority of banks ’ board members remain independent from the controlling firm or other affiliates of the conglomerate. and iii ) third, through the analyses and risk assessments of the financial positions of the entire group. in order to gain a meaningful idea of the risks of a large conglomerate, some financial authorities have suggested that supervision must cover the relevant risk positions of the letter to congressman james a. leach, january 20, 2006. board of governors of the federal reserve system. entire group. this constitutes a formidable challenge. legal amendments would have to be made to compile basic management information on financial condition and risk exposures of the group as a whole. it is also important to send a clear message that the bank will be able to stand alone if the commercial owner gets into trouble, and thus banks ’ depositors and creditors do not need to run for the exit. other conflicts of interest likely to surface when commercial firms become bank owners are the anticompetitive practices that commercial firms may conduct once they have a bank. for instance, commercial firms may require their suppliers to have their financial services arranged by their banks. banks belonging to a commercial firm may also engage in tied selling practices by, for example, extending consumer credit only for purchases made in the commercial retailer. finally, we should be very careful with the protection of personal data to prevent the non - authorized transfer of personal information ( bank secrecy ). final remarks embracing globalization brings both benefits and challenges. the evolution of the financial industry in mexico constitutes a good example. openness to foreign direct investment in the financial system was essential to recapitalize the banking sector and increase efficiency. it also brought other benefits, such as new technologies and products, and advanced risk management techniques. however, it is important that the authorities continue to foster competition through transparency and disclosure, as well as new entrants to the system without increasing the risks to it.

jwala rambarran : implications of the proposed regulatory regime for credit unions feature address by mr jwala rambarran, governor of the central bank of trinidad and tobago, at the 42nd annual general meeting of aero services credit union, port of spain, 29 march 2014. * * * ladies and gentlemen, it is my honour to be asked by the board of directors of aero services credit union co - operative society limited to address its 42nd annual general meeting. i believe this invitation comes at an opportune time for the central bank to once again reach out directly to the credit union movement, as we move even closer towards regulation of the credit union sector. it is also my pleasure to speak directly to you, the membership of aero services credit union. i have known some of your board directors for close to a decade and i am aware that aero services credit union has been responding to the challenges of a harsher socioeconomic climate. i note that, in light of an aging demographic, you have had to expand your membership bond outside the aviation industry. equally impressive is that you have managed to grow your resource base to over tt $ 200 million while managing delinquency in a historically low interest rate environment and more competitive financial services sector. apart from building wealth for your members, aero services credit union continues to demonstrate the fundamental values sacred to the credit union movement, a clear indication that you are living up to your motto “ the credit union where every dream counts ”. you are an example of how credit unions when managed properly can meet their members ’ expectations, maintain their trust and confidence, and fulfill your commitment to those who trust you with their hard earned money. for this reason, i want to underscore that the central bank recognizes the important contribution that credit unions are making to our society, especially in fostering greater financial inclusion by reaching out to the ordinary working men and women who are underserved by traditional financial institutions. today, about one - third of the population can boast of membership in credit unions. credit unions have collectively amassed an asset base of over tt $ 9. 5 billion or 3 percent of the assets of the total financial system assets in trinidad and tobago. your relevance, however, is much richer than your asset base. credit unions have helped their members to develop a healthy savings habit, educated them on financial matters and financed small business start - ups, all while experiencing considerable turbulence and consolidation. you have propelled the ideals of financial inclusion as well. these ideals are