THE IRISH League of Credit Unions (ILCU) is understood to have moved to resolve issues between Davy Stockbrokers and a number of credit unions over the sale of financial products on which the credit unions are currently nursing losses.

The ILCU, which represents the majority of Irish credit unions has approached Davy, according to people close to the matter, offering to act as an intermediary between it and member credit unions to which it marketed perpetual bonds several years ago.

Perpetual bonds are openended investments, usually issued by banks. They pay a set interest rate that is determined by how the rate, or coupon, compares with market interest rates.

Neither ILCU nor Davy would last night confirm the approach.

Davy is understood to be have indicated to ILCU that it would consider the offer.

The league of credit unions is said to be interested in brokering a collective resolution of conflict that has arisen over the sale of the perpetual bonds.

Financial services ombudsman Joe Meade disclosed recently that Davy Stockbrokers advised 139 credit unions to buy €149 million  worth of perpetual bonds. These were subsequently the subject of a complaint to Mr Meade's office from Enfield Credit Union. He directed the broker to buy back the credit union's investments in the three perpetual bonds for €500,000, the price paid for them and also ordered it to refund all fees and commissions paid to it in connection with the matter.

Informed sources say that any resolution will not impact on Davy's determination to pursue its High Court challenge to the ombudsman's ruling. Davy said the value of Enfield Credit Union's €500,000 investment, which was made between September 2004 and April 2005, had fallen to €333,000 by the end of last year, while income received totalled €63,744.

Davy has argued that the credit union fully understood the nature of the bonds and that the bonds fell in value because of the deterioration in the credit markets. Only Enfield has formally complained about the marketing of perpetual bonds to credit unions but a number of other credit unions are known to be concerned about the losses being incurred.