EC Approves Prolongation of Irish Credit Union Resolution Scheme
EC approved prolongation of the Irish scheme for the orderly winding up of credit unions until May 31, 2021. EC found the scheme to be in line with the EU State Aid rules. The scheme is intended to safeguard financial stability when a credit union becomes unable to meet regulatory requirements. The scheme allows Ireland to provide aid for transferring the assets and liabilities of a failing credit union to an acquirer through a competitive process. In Ireland, credit unions are small financial institutions that are not covered by the Bank Recovery and Resolution Directive (BRRD).
The scheme allows Ireland to provide aid for transferring the assets and liabilities of a failing credit union to an acquirer through a competitive process. This will help to achieve the maximum value for the assets and liabilities, ensuring that the aid is limited to the minimum necessary for an orderly winding up and that no buyer gains an undue economic advantage through the acquisition of under-priced assets and liabilities. Ireland chose to make a special sector-funded resolution scheme available to the credit unions, which has been used only three times since its setup. The scheme was initially approved in December 2011 and has been prolonged fifteen times since then, with the last prolongation being in June 2019.
Post the financial crisis, EC had adopted a comprehensive framework to support financial sector during the crisis and this framework spells out common conditions at the EU level for access to public support and the requirements for such aid to be compatible with the internal market in light of state aid principles. It comprises Banking Communication, the Recapitalization Communication, the Impaired Assets Communication, and the Restructuring Communication. These special rules were introduced under Article 107(3)(b) of the Treaty on the functioning of the EU that allows EC to approve state support to remedy a serious disturbance in the economy of a member state.
Related Links
Keywords: Europe, EU, Ireland, Banking, Credit Unions, Resolution, Orderly Resolution, Crisis Management Framework, EC
Previous Article
OCC Consults on Rules on Operations and Digital Activities of BanksRelated Articles
APRA Issues Interim Update to Policy Priorities for 2021 and Beyond
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
EC Adopts Solvency II and Resolution Rules Package for Insurers
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
OCC Issues Booklets on Regulatory Reporting and Earnings
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
ECB Sets Out Results of Economy-Wide Climate Stress Tests
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
EBA Examines Implications of Increasing Use of Digital Platforms in EU
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
