Mr. Ed Sibley:

I thank the members for their questions and comments. I understand the level of frustration and I have sympathy with the points raised about housing difficulties today. I will first address the question of timing. The ability of the Central Bank to make regulations in this area came into force in early 2016. That is the earliest that we could have taken action on this matter. We committed to undertake the consultation and review in 2017 and that is what we are doing. Without getting into a he-said-she-said discussion, high level proposals or aspirations about one side of the balance sheet or the collective availability of funds do not necessarily make for a detailed and well-thought through proposal that we can work on. In the discussions on this, including some of the discussions that we ourselves have had in the Central Bank, there has been some iteration around the best way to use those funds. Direct funding to Government was potentially an option, as was lending. The investment suggestion came from us. There has been a degree of iteration in the discussion around how to get this working.

In my opening remarks I made a point about the standards, controls and risks in the credit union sector. It is important to bear these in mind when it comes to the safeguarding of members' funds. An enormous amount of effort has been made in the sector both to restructure and to improve standards to better safeguard members' funds. There is still work to be done, however, and we can see through our ongoing supervisory work and our engagement in the credit unions themselves that standards still need to be improved. There are in fact significant risks associated with this kind of investment. The typical investment profile of credit unions is that they have relatively short-dated and liquid instruments. They can get in and out of them as required. If there is a change in their liquidity requirements, if they need to repay members' funds, for example, they have the ability to do so quickly. What we are talking about here, however, is an investment that would last for 25 years at a fixed rate of return and set at a period with very low interest rates. This is a very long-term commitment that will have a very significant impact on credit union balance sheets.

This is also taking place at a time when those balance sheets are changing anyway and there is discussion around longer-term lending. I referred to this in my opening remarks. This is not a straightforward investment and there are very significant risks involved for the credits unions. There needs to be a degree of sophistication and risk management within the credit unions in order for them to make these decisions.

Having said that, we have consulted on potential changes and we are very open-minded, both about these changes and about the potential to open up an avenue for credit union investment into social housing. From the start of last year up to our issuing of the consultation paper, we engaged extensively with the credit unions themselves, with their representative bodies and with the approved housing bodies to make sure we have a really good grasp of the issues and risks involved here and of the potential for making this work. Ms Finnegan will come in at this point to discuss our engagement.