Ms Anne Marie McKiernan:

-----and responsibly. I have a great understanding and a certain sympathy with the sector. That is a big challenge. I should point out that we are seeing a number of credit unions which have responded very well to that challenge. In our public statements, we are often more likely pointing out what needs to be done among the weaker ones. This is an opportunity to highlight where we are seeing good developments. Both large and small credit unions have been able to work within the existing framework and environment to be financially and operationally strong.

Credit unions have been able to work within the existing framework and environment to be financially and operationally strong. They are meeting all of our regulatory requirements generally and delivering a range of services to their communities, paying a dividend and being viable into the future. As such, there is a great deal to build on there. In fact, it is that sort of basis we want to see more of across the sector as the platform on which business model development should be built.

What are the factors in the success of those credit unions from which others can learn? It tends to be strong governance and management, plus strong systems and controls which are needed to demonstrate protections as well as to actually protect members funds. It is also a matter of pricing appropriately for risk. We often see credit unions where the interest rate charged on loans is unusually low. While that might be in line with the community and social objective, it may conflict with the financial objective of safeguarding the resilience of the credit union. We are also seeing some proactive if low-key work by a number of credit unions large and small on how to turn their members from savers to borrowers or how to attract members from a younger demographic which is likely to borrow. As I said in my statement, that includes more proactive demographic profiling, social media campaigns, promotion and marketing. I refer to these issues because they are lower cost for credit unions to undertake and they are a reasonable starting point from which to tackle the issue of growing a loan book while developing broader and potentially much more risky or different capability based business models.