For people who are concerned about NAMA, I call on you all to voice your concerns. I would call upon to ask these questions (Brian Lucey)
1. What evidence does NAMA have that the current market price of these
is not in fact going to decline for a number of years, as would be the
case if Ireland were to follow the common experience of previous
2. Why would a temporary nationalisation of the banks be a bad thing,
given that this would provide the taxpayer with a valuable asset which
could be sold in future years?
3. Why does no independent analyst support the governments view on
NAMA? This includes the Swedish finance minister who ran their bad
bank system, who said to the Irish Times that he “favours the more
severe mark-to-market write-down of assets rather than a ‘through the
cycle’ valuation.”, and that “it (NAMA) does not sound like the right
solution to buy assets from private banks.” It also includes the IMF
who said " Insolvent institutions (with insufficient cash flows)
should be closed, merged, or temporarily placed in public ownership
until private sector solutions can be developed ... there have been
numerous instances (for example, Japan, Sweden and the United States),
where a period of public ownership has been used to cleanse balance
sheets and pave the way to sales back to the private sector", in the
context of saying that the likely losses for Irish banks were such as
to render them insolvent.
4. Why not force the equity and bond holders in Irish banks to take
the first place in the queue to absorb the losses that the banks would
have to book were current market prices to be paid for the loans made.
After all, that’s what risk capital is for?
5. If the state overpays for the loans relative to current market
prices, what, apart from a functioning banking system, does the
6. What percentage of book value of the loans should NAMA pay, given
that current market prices for land and development properties are
somewhere around 30% or less of book value?
7. If NAMA were to pay say €60b for loans that are worth only €30b,
how can this transfer of a full years tax revenue to private
speculators be justified in this economic time?
8. If, as is entirely possible, the loans transferred to NAMA do not
provide sufficient income to meet the coupon payments of the bonds
issues by NAMA, will the taxpayer, at least in the short term, not
have to meet these payments?
I will show any feedback I get.