International peer review finds Central Bank is effectively regulating credit union sector

Press Release - 13 January 2020

• Central Bank publishes external review of the performance of its functions towards credit unions.
• Review found that the Central Bank effectively performs its functions in the regulation and supervision of the credit union sector.
• Review provides the Central Bank with recommendations to further improve its effectiveness focusing on supporting credit unions in enhancing their risk management.

The Central Bank of Ireland has today, 13 January 2020, published the “Peer Review: Central Bank of Ireland’s Performance of its Regulatory Functions in Relation to Credit Unions”. The Review, undertaken by an external and experienced team of international regulatory experts from the International Credit Union Regulators’ Network (ICURN) has found that the Central Bank effectively performs its functions in the regulation and supervision of the credit union sector. The Review also highlighted significant improvements since the previous review in 2015.

A team of international regulators, drawn from the US, the UK and Canada, assessed the Central Bank’s compliance with ICURN’s Guiding Principles for the supervision and governance of financial co-operatives, which reflect the unique nature of financial cooperatives.

The Review provides an examination of Ireland’s legislative, regulatory and supervisory framework in relation to credit unions. Commenting on the Review, Registrar of Credit Unions, Patrick Casey said:

“The ICURN review provides external validation of the effectiveness and proportionality of our regulatory and supervisory approach for credit unions.
Our role in relation to credit unions is reflected in our statutory mandate to regulate with a view to ensuring the protection by each credit union of the funds of its members and the maintenance of the financial stability and well-being of the sector. The Central Bank recognises the importance of external scrutiny of our performance which helps to ensure that we continue to measure up to the highest international standards, the expectations of sector stakeholders and deliver on our regulatory obligations.”

“We will consider the findings and recommendations set out in the Review to determine how we can further enhance current practices in the areas referred to in the ICURN team’s recommendations. The Central Bank wishes to express its appreciation to the ICURN team for carrying out this important piece of work.”

Notes:

• The Central Bank is required under Section 32M of the Central Bank Act of 1942 to have an independent review of the performance of its regulatory functions undertaken at least every four years. The last peer review in relation to credit unions was carried out in 2015.

• ICURN is an independent international network of credit union regulators formed in 2007, with members drawn from over 30 countries and jurisdictions, including Ireland, other European countries, USA, Canada and Australia.

• The Review assessed the Central Bank’s compliance with ICURN’s Guiding Principles for Effective Financial Cooperative Supervision and Best Practices for Financial Cooperative Governance. The Guiding Principles take into account the unique nature of financial cooperatives, and using the Basel Committee's Core Principles for Effective Banking Supervision as a guide, provide guiding principles conducive to developing an effective supervisory system for financial cooperatives.