Dáil Éireann Debate, Wednesday - 16 October 2019
83. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 57 of 3 October 2019, the value of deposits and investments held by Irish credit unions in the United Kingdom; and if he will make a statement on the matter. [42361/19]
Amharc ar fhreagraFurther to Parliamentary Question No. 57 of 3 October 2019, I have been informed by the Central Bank that credit unions provide information on ‘Investments by Counterparty’ on their quarterly Prudential Return. Based on data provided by credit unions on the June 2019 Prudential Return credit unions hold c.€13 billion in deposits and investments with c. €1.8 billion held in UK credit institutions.
The Central Bank has advised that under the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations), credit unions are permitted to invest in a prescribed list of investments including accounts in credit institutions and bank bonds issued by credit institutions (defined as a person authorised as same pursuant to Directive 2013/36/EU (CRD IV)).
Based on data reported by credit unions, the Central Bank is aware that a proportion of credit union investments are held with UK entities passporting into Ireland under this Directive. Post-Brexit, the UK will become a third country (non-EU) for the purposes of the CRD IV. In the event that passporting rights no longer apply to UK credit institutions as a direct consequence of the UK withdrawing from the European Union, credit union investments with those counterparties would no longer come within a permitted class of investment under the 2016 Regulations. Under such a scenario breaches of the 2016 Regulations arising would be as a result of circumstances beyond the control of individual credit unions.
The Central Bank issued a communication to credit unions on 16 October 2019 confirming that it is not expecting individual credit unions to take action on these investments now. The Central Bank proposes to put a transitional arrangement in place for such investments, if required, once it has clarity on the terms of a UK exit from the European Union.
