Building Societies Act, 1989

Asset and liability ratios and structures.

39.—(1) A building society shall at all times keep such a proportion of its total assets in liquid form (hereinafter referred to as “liquid assets”) having such a composition as to enable the society to meet its liabilities as they arise.

(2) For the purposes of complying with subsection (1), a society shall have regard to the range and scale of its business and that of any subsidiary or other associated body and the composition and character of its assets and liabilities and those of any such body.

(3) A society may keep liquid assets in addition to those required for the purpose of complying with subsection (1).

(4) The Central Bank may from time to time require a society to maintain—

(a) a specified ratio,

(b) a ratio which does not exceed a specified ratio, or

(c) a ratio which is not less than a specified ratio,

between its assets and its liabilities and the specified ratio may be expressed as a percentage of the assets or liabilities concerned.

(5) A requirement of the Central Bank under subsection (4) may be expressed to apply—

(a) in relation to all societies or to societies of a specified category or specified categories,

(b) in relation to the total assets or total liabilities of the societies concerned or to specified assets or assets of a specified kind or specified liabilities or liabilities of a specified kind of those societies,

(c) in relation to a specified time or times or during a specified period or periods,

and shall have effect in accordance with its terms.

(6) A requirement under subsection (4) which is in force may be revoked by the Central Bank or may be amended by a subsequent requirement under that subsection.

(7) The Central Bank may, from time to time, specify as respects a society requirements as to the composition of its assets and, subject to section 18 (3), requirements as to the composition of its liabilities.

(8) In determining for the purposes of this section the assets and liabilities of a society with which another body corporate is associated, there shall be attributed to the society, in a manner acceptable to or as may be specified by the Central Bank, the whole or part of the assets and liabilities of whatever description of the associated body.

(9) (a) Subject to paragraph (b), “liquid assets” means assets specified as such for the purposes of this section by the Central Bank including deposits with the Bank.

(b) Pending a specification by the Central Bank under paragraph (a), “liquid assets” includes assets held in a form provided for by section 38 of the Building Societies Act, 1976 , notwithstanding the repeal of that Act.

(10) In this section—

(a) “specified” means specified by the Central Bank under this section,

(b) “liabilities” include such contingent liabilities as may be specified by the Central Bank from time to time for the purposes of this section.