Ms Anne Marie McKiernan:

Deputy Pearse Doherty is correct in referencing the World Council of Credit Unions, WOCCU, as having given guidance that a 10% regulatory reserve ratio is an international norm or an indicator level that we could use.

The level of 10% was brought in to increase the reserve requirement on credit unions during the crisis period in recognition of the fact that many credit unions were coming under significant pressure and we needed them to work on their resilience to withstand some of the negative impacts of the crisis. Bringing in the higher level was very much related to ensuring that they had the capability to remain financially sound in the future.

At this time, the reserve ratio remains appropriate for the sector that we are dealing with. In the sector there is a very significant excess of available funds - I mentioned the €11 billion in deposits - relative to the amount of lending by the sector of €4 billion. The regulatory reserve ratio is there to ensure that credit unions are well run and have a fundamental base on which to remain strong.