Mary Upton (Dublin South Central, Labour)
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Question 69: To ask the Tánaiste and Minister for Finance if, in view of recent developments, he envisages a need to amend the legal framework governing the work of the Financial Services Ombudsman; and if he will make a statement on the matter. [7742/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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It would not be appropriate for me, in my role as Minister for Finance, to comment on any matter which is the subject to Court proceedings as is the case in relation to the developments adverted to in the Deputy's question.

My Department of course monitors closely, in consultation with the Office of the Attorney General, any legal issue with the potential to impact upon the current legislative framework governing the regulation of financial services in order to keep me advised of relevant developments and any legislative or policy issues arising in that context.

Mary Upton (Dublin South Central, Labour)
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Question 70: To ask the Tánaiste and Minister for Finance if he proposes measures to ensure that global financial instability does not impact negatively on the health of the domestic credit union sector, particularly in so far as concerns the exposure of credit unions to risky financial instruments purchased under the advice of other financial institutions; and if he will make a statement on the matter. [7741/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As Minister of Finance, my role is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions. The Registrar of Credit Unions is responsible for administering the system of regulation and supervision of credit unions provided under the Credit Union Act, 1997 with a view to the protection by each credit union of the funds of its members, and the maintenance of the financial stability and well-being of credit unions generally.

Under the legislative framework set out in the Credit Union Act the primary function of credit unions is to offer savings and loans services to its members. In view of the very significant growth in credit union savings over recent years reflecting such factors as strong economic and incomes growth overall and the success of the SSIA initiative, the funding position of credit unions is very strong. This has also led, against the backdrop of a significantly greater competition and product choice in the lending market, to significant growth in shares and deposits in many credit unions over and above what is required for their lending activities. These resources are available for investment by credit unions to generate a return for members. The Board of Directors of each individual credit union is responsible for ensuring that its investment policy is prudent and responsible and conforms to what is legally permissible under the Credit Union Act.

In order to assist Boards in effectively discharging this important function, in October 2006 the Registrar of Credit Unions issued a detailed Guidance Note on Investments to help safeguard the risk profile of credit union investments and ensure that members' savings continue to be protected. This provides a solid framework which enables the monitoring of the investment activities of credit unions by the Registrar. Following the recent shift in financial market conditions for investments evident since August last, the Registrar of Credit Unions has recently initiated a process including consultation with stakeholders with a view to revising the existing investment framework. This review will be informed by such factors as recent market developments and an assessment of the investment activities of credit unions overall. My Department is liaising closely with the Registrar of Credit Unions in relation to this work and will advise me on progress in this area.