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THE CENTRAL BANK has released a consultation document that suggests credit union members should take savings above a certain level and put them in banks.
In the paper, the Central Bank says that credit unions should limit members’ savings to €100,000.
That means that credit unions would be obliged to tell members move the surplus to other institutions.
There is no reasoning given for the idea in the paper, but it is believed that credit unions have been advised it is designed to limit the exposure of the state in the event of a credit union closing.
The document, which proposes a host of new rules on reserves, liquidity, lending, investments, and borrowings, is under consultation so, officially speaking, all sides are keeping quiet.
The Central Bank says that it will not be commenting while the public is still submitting views.
The Irish League of Credit Unions (ILCU) says they will be involved in the process.
“The ILCU will be engaging in a consultation process with its affiliated credit unions on this wide ranging paper with a view to making a formal response by the end of February 2015. In relation to the proposed saving limits this is something that the ILCU has objected to previously and will continue to oppose during this consultation period.”
The Department of Finance say that they are considering making a submission.
“The Department is currently considering the paper and a decision will be made in due course on whether or not the Department will contribute to the consultation process before the consultation period closes.”
State Aid
Sources within the movement say that concerns have been raised for a number of reasons and that a case may be taken to Europe.
Some in credit unions argue that an arm of the state arguing that one business be directed to send customers to a competitor constitutes state aid.
Under the Department of Jobs and Enterprise guidelines, measures should not give advantages to any entity, should not favour any entity and should not distort competition.
They are also fear that if members are told to take the surplus savings out, it will send a negative message to members about the ability of the credit union to survive.
It would also impinge on a credit union’s ability to lend. Because they lend based on their assets, a removal of large amounts of savings would limit their ability to give out loans.
Euro has been an unmitigated disaster .
Certainly from wee Paddy’s perspective, bailing out this disaster .
@Willy Malone: Are you even old enough to remember the punt and what the economy was before the bubble? Newsflash! For almost all the time we had our own currency the country was in recession or close to bankrupt.
@8bitplebian: totally agree with you there.in fact can’t see why there can’t be a single world currency.it might cut out all this fluctuation and maybe even some of the corruption.Le Pen fluffed her chances when she misused European Parliament funds.
@Bennythekid: We had big self inflicted recessions in the 30s and 80s. The first was long before the concept of the EU. You can destroy an economy with (Greece) or without (Venezuela) a currency union.
@8bitplebian:
So we needed the Euro to bail us out, and in turn we end up bailing it out, bit of a disaster all round.
@8bitplebian:
Socialism destroyed Venezuela.. https://youtu.be/WCUq0V-3mgo
@8bitplebian: interest rates were also insane back when we had to punt, 18 percent in early eighties. 12 percent in early 90s. Yep, Things were far from better!
It’s funny that people pay no attention to what previously happened in this country.
We also bailed out banks back then too, AIB was bailed out back in the days of the punt.
@8bitplebian: Not quite as black or white. Ireland’s celtic tiger began in the mid 90s when we still had the punt, 2000-2001 were great, once the Euro came into effect in 2002 it kept going, but the economy was already performing well. The unemployment and economics of the past were die to failed policies. It was the change to corporate tax and economic measures from the 90s that gave us a boom and a recession. The Euro just made it more difficult to come out of that recession. Look at Iceland, no Euro, hot rock bottom in 2008 and they are on the top of the world now and has been for a while already.
@Juan Venegas: Couple of points there. The “real” boom appears to have lasted for no more than a few years at best from around 97 to 2001 with the rest being property inspired madness. I’d be hesitant to call that as having anything to do with currency. Also the comparison to Iceland is not a fair one. It has the population of Limerick county and could make a nice enough living just selling fish to the rest of the world.
@8bitplebian: Or old enough to remember the Pound?
Let’s hope Le Pen wins outright
It will be the best thing for France
@Gary Purcell: yeah, nothing like starting a economic war to make things better for everyone.
@Gary Purcell: A brainless populist thug, clearly melting under any form of adult scrutiny.
@Diarmuid:
Coming from you that’s a bit rich, wasn’t it you who hoped the EU would give the UK ‘a good hiding’ over Brexit? What did you mean exactly? An invasion? Sanctions? Punishing the voters for actually voting and winning, is a bit sick.
Cue all the comments about how terrible the euro is followed by the usual verbiage about printing our own currency again. Countries like Ireland who grossly mismanage and inflate their economies as in the early 2000′s will eventually experience a crash, irrespective of them being constrained by the rules of a single currency union or not.
@8bitplebian: There’s some truth in that, but being in a single currency removes much of the ability to do the management necessary. FF made an unholy mess of the public finances, but there was very little they could do to prevent the mad accumulation of private debt that was fuelled by the euro.
@Ben McArthur: I think that’s an unknown. When FF faced down the economic crisis in the 80s (created in part by their own 1977 budget) the approach they took made the situation progressively worse even with all the tools they had available. We also had very high inflation and a currency devaluation to worry about. So there’s no reason to think the 2008 crash would have been handled any better.
@8bitplebian:
Correct me if I misunderstand your position but your arguing that our politicians are inept whether in the Euro or not, so its better to stay in it?
@Maurice Bourke: No, more that blaming the single currency for the 2008 crash and subsequent recession is inaccurate. Economic mismanagement can happen with or without the euro. If Ireland had properly regulated its banks and controlled the property bubble, the impact of the then financial crisis would have been much less severe.
Le Pen is as damaged as her father -
@kingstown: The fake fight with her daddy is the most cynical political move in decades. And transparent as hell.
The thing about Le Pen is she could win if she pledged a tough crackdown on non-EU migration, while maintaining the status quo economically and pledging to keep the euro.
If she just stuck to that issue, she would win.
@Fred Jensen: Le Pen might not even get to the 2nd round and there are absolutely no poll results that even suggest that she will win.
@Neil Mcdonough:
I know. I’m saying she is shooting herself in the foot with her anti-euro rhetoric. Peoples savings would be wiped out. She should just stick purely to the non-EU migration issue if she wants to win.
@Fred Jensen: I don’t understand her point about the Euro. Some countries might do well to leave it, Greece for example ( mainly because they should have never adopted it in the first place ) but there is no way it would benefit France in any way anymore.
That was by far not the moment of that debate. Macron is the worst that could happen to France,worst than le pen.that guy agree with everyone and can never answer a question. The best moments of the debate came when the so called “petit candidates “started speaking specially Mr asselinaud. Mr poutou or Miss arthaud. Macron telling people that Tx to European Union we were not killing each other what a joke that guy is.
@Frantz Harband: “Macron is the worst that could happen to France …” Most people agree, yet the media always give him as favourite. Hmmm…
@Neil Mcdonough: Like Simon Coveney, he is backed by the bilderburgers
Ireland cannot be trusted to manage its own independent currency. Look at what Charlie Haughey did when Ireland did a devaluation. he passed insider information to his cronies so that they could enrich themselves.
It would be better, in light of the credit bubble from 2002 to 2007, had Ireland not joined the euro because it facilitated a massive credit expansion for non economically productive borrowing but exiting the euro would now be be very damaging.
Public goverance and economic management in Ireland are very lacking. The Punch and Judy of FG andf FF does not help. It is a Lanigan’s Ball.
@Neil Mcdonough: Like Simon Coveney, he has the same bilderburgh backing
Macron or Le Pen?
Pragmatists will prefer Macron.
Ideologues with far right sympathies, Brexit types, will prefer Le Pen.
At least there is a choice but with choice comes adult responsibility.
@Tony Daly: Listened to the entire debate and some of the commentry this morning. Le Pen has her support but did herself no favours trying to convince anyone else last night. Macron, the candidate of the media did no better. The surprising thing is the media constantly make him favourite yet no-one I know, both from the left and right, can stand him. He’s seen as being more liberal than Fillon, thatcherite even, but mostly an empty vessel who tries to please everyone.
Melenchon maybe but unlikely, and no-one should write off Fillon yet. If it wasn’t for his affairs with the law, he would stand head and shoulders above the rest in terms of stature and experience. Going to be an interesting few weeks!
@Neil Mcdonough: all the French people I know will happily vote Macron.
@David Fülöp: Interesting. That would have been true also a while back for some of my acquaintances, but not anymore. Sound more and more like Vallsozy everyday.
@David Fülöp: your friends are blind . that guy is a joke. He will the continuation of what’s happening for the last 15 years in France.
I never liked when we switched from the punt to the euro. I found I could get very little with the euro. With the old currency you could get a litre of milk for a pound/punt. With the euro, out can but a bag of chrisps with a euro and then, that’s it. It’s gone. There was no value in the euro. The euro only benefitted those who dealt with mainland Europe often like for holidays or work.
So I was never a fan of the euro. However we are stuck with it. I don’t like it when I read comments about ditching the euro and going back to the old currency. A new currency will be worthless for a long time and imports into the country would be very expensive and we rely a lot on imports.
Debates will mean very little. Le Pen hasn’t got a hope. Even if she gets through the first round, she’ll get utterly demolished in the 2nd round of voting.
Another one with lots of rhetoric and no plan just like the brexiteers. Easy to knock something down very difficult to put in a credible alternative. But no one looks at that.
When Ireland had the punt it was like living in Mexico, there was always the risk of devaluation and currency shocks.
@Robert Nugent:
Soros style devaluation?
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