VILNIUS, Lithuania (8/23/12)--The central bank of Lithuania Monday unveiled tougher prudential requirements for the country's credit unions. The move is prompted by the end of rules related to the calculation of large exposure ratios.
The Bank of Lithuania board said that as of Jan. 1, 2012, all credit unions are required to include funds in credit institutions such as banks and credit unions in their calculations for maximum exposure. The requirement limits the funds credit unions can risk from other sources, according to The Baltic Course (Aug. 20).
Also, the maximum exposure ratio will be extended and apply to all credit unions. Previously, those with adjusted capital fees of less than US$718,756 were exempt.
The central bank said the purpose of the new requirements is to encourage credit unions to invest funds cautiously and safeguard depositors' interests. It also is requiring greater experience from managers and has formulated an exam for those who do not meet the experience requirements.
Lithuania has 62 credit unions serving 124,383 members. They have combined assets totaling more than $537 million, according to the World Council of Credit Unions' statistics.