The legislation will also emphasize good governance, which is critical for the protection of shareholders and for effective financial management. For example, Board members will be required to meet certain fit and proper criteria and an appropriate level of financial competence, as determined by the credit union, not by the Central Bank.
If policymakers react properly, this can boost consumer, business and investor confidence – and the current crisis is, to a large extent, also a crisis of confidence. If, on the other hand, there is a lack of political action, the volatility will spread to more and more countries.