Mr. Ed Farrell:

Deputy Michael McGrath is correct that four years ago, very large numbers were being pushed about. We always objected to those numbers, having conducted our own stress tests on the figures for the credit unions individually and for the credit union movement, and we thought those figures were way off. Four credit unions have received assistance from Government funds over the past four years - that is, 1% of credit unions - of approximately €20 million. Through the league's own savings protection fund, which is a prudent rainy-day fund it set up 20 or 30 years ago to help credit unions that might get into financial or other difficulty over the years, the league has helped a small percentage of credit unions over those tough days since Ireland came into the global financial crisis. That fund had €120 million in it five years ago and still has €100 million in it after helping a small percentage of credit unions. If one rolls forward to September 2015, the credit union movement across the board has 15% in capital, while it needs to have 10% in capital. As I stated earlier, credit unions have €13 billion in assets and the capital requirement, if one likes, is 10% of total assets. This is one of our ongoing issues with the regulations, in that it is not risk-weighted. Anyway, the capital requirement at 10% is €1.3 billion.

The credit unions have €2.2 billion in capital, which means that we have €700 million or €800 million extra. We have better capital reserves than we need. Some credit unions are merging through the auspices of the Credit Union Restructuring Board, ReBo, while others are merging with capital assistance from the savings protection fund. We have handled half a dozen of these so far this year and do not believe anything unforeseen will happen. A handful of credit unions are just under the 10% minimum figure and we are working with them on a stand-alone basis or helping them to merge with a view to bringing them above the 10% level.

The good news is that there is €3.5 billion in loans. We have €13 billion in assets, €11 billion in savings and €3.5 billion in our loan books. We have turned a corner. In the past two quarters there has been a slight increase in the loan books of approximately 0.5%. After the onslaught of the recession, many people turned away from borrowing and repaired household balance sheets, as we have heard. That the total credit union loan book has started to grow in the past two quarters is important if credit unions are to increase their incomes.