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IR - Changes to credit union investment regulations

18/01/2018

On 1 february 2018, the Central Bank of Ireland today announced changes to the investment regulations for credit unions. Three new investment classes are being introduced, accompanied by the introduction of specified credit quality, maturity and concentration limits.

On 1 february 2018, the Central Bank of Ireland today announced changes to the investment regulations for credit unions. Three new investment classes are being introduced, accompanied by the introduction of specified credit quality, maturity and concentration limits.

The new investment classes being introduced are: Bonds issued by Supranational Entities; Corporate Bonds; and Investments in Tier 3 Approved Housing Bodies[1].

In order to ensure that the investment framework remains appropriate for the credit union sector, the Central Bank undertook a review of the investment regulations in 2017. This review considered whether it was appropriate and prudent to facilitate investment by credit unions in other classes of investments. A consultation Paper set out our proposed changes to the framework, which were primarily aimed at increasing diversification in credit union investment portfolios, and invited feedback on these proposals. The Central Bank has given detailed consideration to the submissions received on the proposals set out in the consultation paper and this feedback has influenced the approach in areas such as:
     - Concentration limits for new classes of investments;
     - The application of liquidity requirements; an
     - Transitional arrangements for the revised counterparty limit.