Credit Union Act 1997
F174 [ Liquidity.
85A. — (1) In this section —
‘ liquid assets ’ means the assets held by a credit union to enable it to meet its obligations as they arise;
‘ maturity mismatch ’ means the ongoing or possible future divergence between a credit union ’ s assets and liabilities because non liquid assets of the credit union have not or, at the appropriate time, will not have matured;
‘ total assets ’ means all the assets of a credit union having due regard to the accounting principles in section 110 after deducting provisions for bad and doubtful debts.
(2) A credit union shall at all times keep a proportion of its total assets in liquid form (in this section referred to as ‘ liquid assets ’ ) so as to enable the credit union to meet its obligations as they arise. The proportion of assets kept in liquid form shall take into account the nature, scale and complexity of the credit union, and the composition and maturity of its assets and liabilities.
(3) The Bank may prescribe the liquidity requirements that a credit union is required to maintain at a minimum as well as conditions on the application of the liquidity requirements. Regulations made by the Bank for the purpose of this section may deal with other matters related to minimum liquidity requirements, including —
( a ) the proportion and nature of assets to be held in liquid form,
( b ) the holding of liquid assets based on the duration of loans,
( c ) in relation to maturity mismatches, and
( d ) the liquid assets to be held as a safeguard on the basis of stressed conditions that may arise.
(4) In prescribing matters for the purposes of this section, the Bank shall have regard to the need to ensure that the requirements imposed by the regulations made by it are effective and proportionate having regard to the nature, scale and complexity of credit unions, or the category or categories of credit unions, to which the regulations will apply. ]
Inserted (1.01.2016) by Credit Union and Co-operation with Overseas Regulators Act 2012 (40/2012), s. 30, S.I. No. 584 of 2015.