Ireland Plans $1.3 Billion Bailout Of CUs

Credit Union Journal Daily Briefing | Monday, October 10, 2011

DUBLIN, Ireland – The Finance Ministry is predicting as many as a fourth of the country’s 407 credit union could be merged or liquidated under a government bailout that will pump more than $1.3 billion into the troubled lenders.

The credit union assistance is to come from unused funds form the country’s bank bailout.

"I seriously intend sorting out the credit unions and some of them we'll have to do immediately but we won't do it in one big bang," Ireland's finance minister Michael Noonan told Dublin's upper parliament on Thursday.

"My advice already is that it will cost between half a billion and a billion because the major sorting out is recapitalization. We recapitalized the banks for less than we expected so we have the resources, we won't have to go back to exchequer for it,” he said.

Credit unions are a major part of Ireland’s financial landscape and serve an estimated two-thirds of the nation’s 4.5 million people. The country’s Central Bank, which regulates credit unions, estimated 79 credit unions to be at risk of insolvency.