Joan Burton (Dublin West, Labour)

Has the Minister or the regulator of credit unions examined the types of investments credit unions have been making in the context of the turbulence in financial markets? I do not know whether guidance has been given to credit unions or whether there is any oversight in regard to investments in financial derivatives by credit unions. The regulations require that credit unions have to hold a very high level of investment on their balance sheets, which is fair enough. Credit unions have lobbied to be allowed to lend more. The increase in the loan capacity introduced by the Minister has been good but in regard to the investment side of their balance sheet, some broking firms have been heavily selling to credit unions with other institutions' financial derivative products. Has the Minister an insight into what the extent of this might be or has the regulator of the credit unions investigated the matter?

There has been heavy advertising with regard to financial investment products in Ireland and, particularly in recent months, investments in international property developments, particularly in Europe and slightly further afield. Very often, the entry point is €5,000 or above. Again, we do not want a regulatory structure that is too intense — we cannot save people from themselves. However, there is a balance to be struck.

In recent years, a number of investment vehicles where the base of the investment was overseas property have run into trouble. For example, in recent months changes to Spanish planning laws have caused significant problems in the Spanish property market. Are Irish people borrowing from their credit unions to invest in overseas properties? While we do not want to over-regulate, people are now buying into overseas financial investments and the issue arises as to whether they are properly advised and what we can do to give them better advice. At the end of the day, they are free agents and are entitled to borrow money to invest in overseas property. However, we should advise them to exercise due caution with regard to such investments because the advertising of some of those investments is incredibly seductive — I am sure the odd Deputy feels like investing although, luckily, we are not paid enough to do that.

Has the Minister given any thought to this area? If the credit crunch and scaling down of the property market are set to continue, and interest rates stay higher than previously, some who have borrowed a lot of money from credit unions may find that the overseas property they have bought or committed to does not provide as a good a return as they expected when originally investing.

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