As a lifelong supporter of Credit Unions and the important role they play in Irish society, I recently wrote a formal letter to EU Internal Market Commissioner Michel Barnier requesting that he investigate the legality of the Irish Government decision to "burn" credit union bondholders in IBRC.
I contacted the Commissioner on foot of the shocking news that a number of Irish Credit Unions - member-owned not-for-profit financial organisations - are together carrying a loss of approximately €15m following Irish Government’s decision to liquidate Irish Banking Resolution Corporation (IBRC), formerly Anglo-Irish Bank.
These Credit Unions invested in a custom-made Anglo-Irish bond in good faith - Anglo had the highest possible international credit rating at the time - but they have now been informed by Minister Noonan that their investment will not be repaid.
The Minister argues that since these deposits are not covered by the State’s Eligible Liabilities Guarantee Scheme, any further claim by Credit Unions for the outstanding balances will only arise where funds remain available at the end of the liquidation process - in other words, forget about it.
It seems outrageous to me that these bond repayments will not be honoured when senior foreign bondholders were repaid every single cent they invested.
I have therefore asked Commissioner Barnier to assess whether the Minister's actions constitute a breach of the EU Deposit Guarantee Scheme - it would seem to me a most unjust action by the Irish government if these Credit Unions, who represent normal Irish savers, were so cruelly forced to bear the brunt of the mistakes of crooked banks.
For more on my work on Credit Unions, see:
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