Dáil Éireann Debate, Wednesday - 18 November 2015
64. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding credit unions and the regulatory reserve ratio; and if he will make a statement on the matter. [40764/15]
View answerThe issue of the regulatory reserve ratio for credit unions is a matter for the Registrar of Credit Unions at the Central Bank who is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
I have been informed by the Central Bank that the rationale for the introduction of a 10% Regulatory Reserve Ratio in 2009 took account of a number of factors including the World Council of Credit Unions (WOCCU) recommendation of 10% of assets, the level of reserves in the sector at that time and the limited ability for Irish credit unions to raise capital compared to credit unions in other jurisdictions and other financial institutions (credit union reserves are only generated from retained earnings).
I have further been informed that in relation to a risk weighted approach to reserves, as previously indicated consideration will be given to a risk weighted approach by the Central Bank post sector restructuring.
The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to continue to support a strengthened and growing credit union movement.
