Michael McGrath (Cork South Central, Fianna Fail)
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146. To ask the Minister for Finance further to Parliamentary Question No. 78 of 29 September 2016, if consideration has been given to increasing the oversight in view of the extent of powers devolved to the Central Bank in respect of credit unions; his views on whether a peer review every four years is sufficient oversight; and if he will make a statement on the matter. [15973/17]

Michael McGrath (Cork South Central, Fianna Fail)
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148. To ask the Minister for Finance if a review of the Central Bank's regulatory performance and any other relevant matter has been undertaken with regard to the Registrar of Credit Unions as stipulated by the Central Bank Reform Act 2010; if he will be examining this review; if he will publish this review; and if he will make a statement on the matter. [15975/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 146 and 148 together.

My role as Minister for Finance 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 at the Central Bank is the independent regulator for credit unions.  Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.

The Central Bank is accountable through legislation as follows:

- the requirement to prepare a three-year strategic plan for submission to the Minister for Finance;

- preparation of a statement of the Central Bank's performance in regulating financial services which includes the annual report prepared by the Registrar of Credit Unions with respect to the activities of the Registrar of Credit Unions; and

- the requirement at least every four years to arrange for an international peer review of the Central Bank's regulatory performance.

In addition, the Registrar of Credit Unions  appears before Oireachtas Committees when invited to do so.

Under section 32M of the Central Bank Act 1942, the Central Bank is required, at least every four years, to make arrangements for a peer review of the Central Bank's performance of its regulatory functions.

The first such peer review of the Central Bank's performance of its regulatory functions in relation to credit unions was undertaken in 2015 by the International Credit Union Regulators' Network (ICURN). The peer review report was published in September 2015. The basis for the peer review was the 'ICURN Guiding Principles for Effective Prudential Supervision of Cooperative Financial Institutions (2011)', which were developed using the Basel Committee on Banking Supervision's Core Principles for Effective Banking Supervision as a guide.

The overall finding in the peer review report was that the Central Bank effectively performs its functions in the regulation and supervision of the credit union sector in Ireland and had effectively undertaken the demanding task of introducing a comprehensive regulatory structure of credit unions. The report assessed the Central Bank's performance against twenty-three Guiding Principles with each one assessed using five grading categories.  ICURN provided a rating of 'Compliant' for twenty Guiding Principles and 'Largely Compliant' for three Guiding Principles.

Guiding Principle 1 focused on the effectiveness of the legal framework, including powers for authorisation, supervision, powers to enforce compliance with relevant laws, safety and soundness and legal protection for supervisors. The ICURN review rated the Central Bank compliant for guiding principle 1.

The review included some recommendations for refinements under the following three broad areas:

- Supervisory Approach;

- Communications and Guidance; and

- Resources.

I have been informed by the Central Bank that it has taken actions and initiatives to implement these recommendations. The full ICURN peer review report is available on the Central Bank's website.  

Based on ICURN's overall finding in the 2015 peer review report that the Central Bank effectively performs its functions in the regulation and supervision of the credit union sector in Ireland and based on my Department's regular interaction with the Registry, I am satisfied that more regular reviews are not warranted.