Joining the Big Six banks and Desjardins, the credit union central for B.C. and Ontario, Central 1 Credit Union, has been named as a domestic systemically important financial institution (D-SIFI).

BC’s Financial Institutions Commission (FICOM), which regulates the province’s credit unions, confirmed today that it has designated Central 1 Credit Union as a D-SIFI, which means that it has been deemed critical to the financial system and will face added regulation as a result.

The designation is based on Central 1’s role in managing the liquidity of its member credit unions, and the provision of clearing and payment settlement services for credit unions in all provinces outside of Quebec, and to other financial institutions and provincial governments; it was not based on the organization’s size.

“With the D-SIFI designation, FICOM has recognized the importance of Central 1 to the overall health and stability of the national credit union system,” said Don Wright, Central 1’s president & CEO.

With its designation, Central 1 will face an enhanced regulatory and supervisory framework, including: new liquidity and capital requirements designed to increase Central 1’s ability to absorb shocks arising from potential financial and economic stresses; stronger governance and risk management expectations for its core business activities; and, an obligation to develop a recovery and resolution plan.

FICOM will periodically review Central 1’s D-SIFI status, as well as the accompanying regulatory and supervisory requirements.