Ireland´s Registrar of Credit Unions says they may not all survive

Discussion in 'Wall St. News' started by ASusilovic, Nov 8, 2010.

  1. Sees increasing number of credit unions under pressure

    * Says important to take pre-emptive measures

    (Adds data, quotes, background)

    DUBLIN, Nov 8 (Reuters) - Ireland's credit unions may need to be significantly restructured if arrears continue to rise and lending opportunities remain subdued, the official in charge of regulating the industry warned on Monday.

    Some of Ireland's credit unions -- community-based savings and lending clubs owned by their members -- lent aggressively during the go-go years of the "Celtic Tiger" economy and are now struggling during a severe downturn.

    "Not all credit unions will make it through this difficult financial and economic environment in their current structure," James O'Brien, the registrar of credit unions, told the National Supervisors Forum.

    "The subject of 'restructuring' within the credit union sector must now be put firmly on the table for open and considered discussion."

    O'Brien said the regulator would move swiftly to prevent a failure of a credit union.

    "It is important ... that we are able to take appropriate pre-emptive action to restructure credit unions where we deem this necessary in order to protect members' funds and the maintenance of the financial stability and well-being of credit unions generally."

    The group intends to put forward proposals early in 2011.

    "A failure of one or more credit unions could lead to a significant loss of confidence across the sector. This must be avoided."

    O'Brien said the regulator would work at identifying weak businesses, but he also called on credit unions to be pro-active and consider mergers to pre-empt financial collapse.

    He said that even greater reform may be needed than first proposed in a recent consultation paper.

    Ireland's credit unions hold savings of 11.9 billion euros ($16.55 billion) and have 2.9 million members which equates to nearly two thirds of the country's population.

    Ireland's financial regulator warned last month that credit unions were a source of concern. [ID:nLDE6951KL]

    Matthew Elderfield, the central bank's head of financial regulation, said that credit unions were under-provisioned on their loans by 40 percent on average.

    (Reporting by Carmel Crimmins and Lorraine Turner; Editing by David Holmes and Elaine Hardcastle) ($1=.7189 Euro)
  2. Ireland is going down fast.
  3. Ireland's problem is that they are too small and might be offered up by the EU as a sacrifice.
  4. It´s going down fast and will need the help of EU / IMF.
  5. mahadiga