Is the 10% regulatory reserve too high?

Whats actually frightening is that the Regulator requires Credit Unions to have a 10% Regulatory Reserve of Total Assets from retained profits er..no mention of any other capital. Given that the default position on Basel III is er 3% of Total Assets stripping out any risk weightings .. its raises the question as to what the logic is for such a percentage. Any views?

@Slim
The 10% ratio for CU as enunciated by the Registar is based on ALL assets and is Retained Profits only and takes NO account of risk weightings (eg in Basel the non-weighted percentage is 3%).

Would you look at the WCCU 10% ratio and tell me what is used to make it up.

However - lets look at the 10% reserve. Whats your view on what is included as counting for the Reserve.

The Irish CU 10% reserve is made up exclusively of retained profits, which is but one element of several that could have been included.

The Irish CU is on ALL assets - so if a CU have €10m in government securities, german bunds, bank account they MUST have a Reserve of 10% against this.

This is the obscenity. The Basel III rules when you strip away the risk weightings the reserve ratio is THREE %.

Note - if Bank of Ireland had kept the reserve ratio to 4% FOUR PERCENT of total assets they would not have needed a bailout repeat they would not have needed a bailout.

We need the debate on the absurdity of what the Regulator is doing.

These important posts got lost in a longer thread which covered lots of issues. I think that the issue needs to be debated.

Could someone familiar with the issue, give an example of what it all means?