DUBLIN, Ireland–Credit unions in the Republic of Ireland may be forced to withdraw €1.8 billion of deposits and investments currently held with financial institutions in the United Kingdom in the event of a “disorderly” Brexit.
A spokesperson for Irish politician Fianna Fáil, Michael McGrath, is raising concerns over the credit union deposits after he received a response to a parliamentary question, which clarified that credit unions will not be allowed to hold investments in institutions in a so-called third country outside the European Union, according to the Irish Times.
The Times reported Ed Sibley, a deputy governor of the Central Bank, which regulates credit unions in Ireland, told reporters at a briefing the €1.8 billion of Irish credit union investments in the U.K. are potentially affected and that his department will be communicating with CUs on the matter in the coming days.
“We will be pragmatic about it,” Sibley said, when asked if a no-deal Brexit could trigger an immediate requirement that credit unions pull U.K. investments, the Irish Times reported.
‘Completely Unprepared’
Credit unions in the Republic of Ireland had €12.4 billion of investments at the end of March, according to the Central Bank, with 76% of the amount was made up of deposits in authorized credit institutions.
On that basis, U.K. deposits and investments account for 14.5% of the total, the Irish Times calculated.
“I am concerned that this is only being looked at now,” McGrath was quoted as saying. “It shows once again that, if the U.K. had crashed out last March, we would have been completely unprepared.”
The U.K. is scheduled to leave the E.U. at the end of this month.