Pearse Doherty (Donegal South West, Sinn Fein)
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The Registrar of Credit Unions is asking credit unions to carry a capital risk weight of 100% for investment in Government bonds when, by international standards, it should be down at 20%.

My next question is on lending to small businesses. Ms McKiernan said that lending to small businesses has to be 50% of the total capital requirement. Given that the capital requirement has no connection whatsoever to the risk asset mix, this will force credit unions to engage in unsecured lending when they reach 50% of capital in order to increase their capital so that they can lend on to small businesses. Mortgage lending, which is secured, must not exceed 10% of the total loan portfolio over a ten-year period so, when they hit 10%, the same situation arises. They cannot lend any more in mortgages so they increase unsecured, riskier lending to increase their overall loan portfolio and thereby increase their secured lending. This does not make sense.