Financial cooperatives (FCs) differ from commercial banks mainly in their ownership structure and primary objectives. These characteristics confer competitive advantages but also restrict FCs' ability to grow, giving rise to concentration risks as well as challenges in governance and resolution. Moreover, technological innovation may be eroding some of the competitive advantages traditionally enjoyed by FCs. All this strengthens the case for enhanced cooperation and consolidation. Based on a survey of regulators and supervisors from both emerging market and advanced economies, the paper outlines these challenges in the new regulatory and technological context and assesses how FCs and the relevant authorities are responding. 

JEL classification: G21, G28, G32, G38, P13

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Read the full paper at: https://www.bis.org/fsi/publ/insights15.htm

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