Dáil Éireann Debate, Wednesday - 15 January 2014
139. Deputy Michael Healy-Rae asked the Minister for Finance the reason the Central Bank of Ireland has reiterated controversial security rules for credit unions barring them from investing in the highest rated sovereign bonds, but at the same time making exceptions for Irish Government debt and Irish banks; and if he will make a statement on the matter. [1254/14]
View answerSection 43 of the Credit Union Act 1997 sets out legislative requirements in relation to investment of surplus funds by a credit union. The First Schedule of the Trustee Act 1893 (as amended by the Trustee (Authorised Investments) Order 1998) sets out securities that trustees and, by virtue of section 43(1) of the Credit Union Act 1997, credit unions, are authorised to invest in.
The Registrar of Credit Unions, who is the independent regulator for credit unions within the Central Bank, issued a circular to credit unions on 19 December 2013 regarding Investments in State Securities other than Irish State Securities. The purpose of the circular is to provide clarification on certain requirements contained in the First Schedule of the Trustee Act 1893 (as amended by the Trustee (Authorised Investments) Order 1998) (the Order) relating to State securities. The circular does not contain any new requirements.
The requirements contained in the First Schedule of the Order do not preclude credit unions from investing in the highest rated sovereign bonds. They do include a requirement that investments other than investments in Securities issued by the Irish State and Authorised Credit Institutions can only be made where the issuer has a rating in the case of (1) long-term securities, that is not lower than AA or its equivalent or (2) in the case of short-term securities, that is not lower than A1 or its equivalent.
