Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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493. To ask the Minister for Finance the amount of Irish Government Bonds held by Irish credit institutions and Irish credit unions; for an update on Ireland’s position on the regulatory treatment of sovereign exposures; and if he will make a statement on the matter. [58909/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Central Bank of Ireland has provided me with the following information in relation to this matter.

The Central Bank publishes monthly data detailing sectoral holdings of www.centralbank.ie/statistics/data-and-analysis/securities-statistics/holdings-of-long-term-irish-government-bonds The published figures includes aggregated Holdings of Irish Long-Term Government Bonds by Credit Institutions resident in Ireland (which includes all Banks and Credit Unions) and the Central Bank of Ireland.

At end-August 2025 the aggregate holdings of Irish Government Long-term Bonds for resident Credit Institutions and Central Bank of Ireland totalled €61,050m. No further breakdown is published.

Regarding the regulatory treatment of sovereign exposures for credit institutions authorised in Ireland, Ireland applies the EU prudential framework under the Capital Requirements Regulation (CRR). The standardised approach to credit risk under the CRR permits credit institutions to apply a zero per cent risk weight for their exposures to Member States’ central governments where the exposure is denominated and funded in the domestic currency of that government.

Credit unions in Ireland are regulated and supervised under the Credit Union Act, 1997 (the 1997 Act) and regulations issued by the Central Bank, namely the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (the 2016 Regulations), which set out the framework for the registration, regulation and operation of credit unions including detailed governance requirements and prudential requirements on items such as reserves, liquidity and investments.

Credit unions are subject to minimum regulatory reserve requirements under the 1997 Act and the 2016 Regulations. The 2016 Regulations require that credit unions “establish and maintain a minimum regulatory reserve requirement of at least 10 per cent of the assets of the credit union”.

In line with this requirement credit unions are required to hold at least 10% of all assets - including any Irish State Securities investment assets they hold - as a regulatory reserve.

The reserve requirement for credit unions is calculated on a non-risk weighted, leverage ratio basis. This is a reflection of a number of factors including: available sources of reserves (retained earnings only), the need for individual credit unions to have the capacity to absorb potential losses in absolute terms and the non-complex business model currently operated by Irish credit unions. Credit unions are not subject to additional capital buffer requirements, such as the Countercyclical Capital Buffer, that would typically apply as part of a risk weighted capital approach. Credit unions are expected to operate with a level of reserves above the 10% regulatory reserve requirement. It is for the board of directors of each credit union to decide on the amount of reserves to hold in excess of the minimum requirement having taken prudent account of the scale and complexity of the credit union’s business, risk profile and prevailing market conditions.