DUBLIN, Ireland (4/27/09)--Irish credit unions have been advised by their national financial regulator to keep a reserve ratio of at least 10% of their assets by September 30, or they will face restricted operations. The Irish Examiner
reported Wednesday that the rule applies to each individual credit union. The office’s decision was based on a difficult economic environment, the newspaper said. “The recent turmoil in global financial markets has highlighted the importance for all financial institutions to ensure they have sufficient reserves to support their undertakings and maintain confidence in the financial system,” said a document from the Office of the Registrar of Credit Unions. “Furthermore, the difficult economic environment that credit unions are currently experiencing places increased emphasis on the requirement for credit unions to ensure they are maintaining adequate reserves.” In some cases, credit unions may be required to hold more than 10% in assets at the request of the registrar. Credit unions that cannot meet the reserve requirement must have:
* 8% of reserves by September 30; * 9% of reserves by Sept. 30, 2010; and * 10% of reserves by Sept. 30, 2011.
The reserves must be “non-distributable and unrestricted,” the newspaper added.