Bank regulations are set by the central banks, and the central banks get their directives from the Bank for International Settlements (BIS) in Switzerland. Basically the BIS is a quasi international organisation that has no democratic basis and has been established by the private banking system to try to compel or trick all nation states to adopt a private banking model whose rules they - certain powerful Anglo-American banks initially - set up. No national government is required to follow BIS guidelines but almost all do because of the omnipotence of the private bankers behind BIS.Apart from the Reserve Bank, the Australian branch of the BIS is APRA - Australian Prudential Regulation Authority. APRA is the official regulator of the banking industry, insurance and superannuation funds and so on. To get an idea of who is in charge of APRA, consider the fact that APRA is funded not by the government, but by the banks it regulates. How does the saying go? "He who pays the piper calls the tune"?The BIS would like to eradicate community banks like the traditional, and still powerful, German cooperative banks. FEC banking will be at the very extreme end of BIS opprobrium. These BIS regulations which the Reserve Bank and APRA follow unswervingly require that all loans are ‘secured’ either by collateral provided by the borrower or the bank’s own capital. The requirements to secure loans means that either only rich people can make loans or that only rich people can get loans.
These banking rules puts us in a dilemma: FEC gives away a lot of its communal revenue to not-for-profits and it also has the philosophy of not requiring collateral on loans: so how are we to provide the collateral required according to these regulations? it will not have a lot of assets to make 'secured' loans with. Its 'security' is in the whole of the FEC economy and not in the treasury. Since we have a philosophy of not requiring collateral on loans, this creates a bind. FEC has to comply with the BIS regulations and it has to get creative in order to overcome them. In an article titled FEC securitisation of loans, I outline how this can be done.