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Banks (Finance)

NAMA Vote to Be Recalled Over Summer for Legislation Pass

Strategic Insights

— 1 min read

Finance Minister Brian Lenihan announced that the Dail will be recalled over the summer if necessary to pass the law establishing the National Asset Management Agency (NAMA). The agency is designed to manage bad bank loans, with legislation slated for publication by the end of July. Lenihan emphasized the need for caution, citing "enormous practical difficulties" in setting up NAMA. Without the agency, the banking sector would be forced to confront the reality of its losses, but there are concerns about the legislation's effectiveness and the potential for taxpayers to bear the cost.

Key Takeaways:

  • Finance Minister Brian Lenihan has pledged to recall the Dail over the summer if necessary to pass the NAMA legislation.
  • The legislation establishing NAMA is scheduled for publication by the end of July.
  • There are concerns about the practical difficulties in setting up NAMA, including the framing of governing legislation.
  • Ulster Bank senior economist Pat McArdle predicts that Ireland can recover if it maintains prudent fiscal policies, but renewed growth will take time to achieve.
  • Fine Gael finance spokesman Richard Bruton has expressed skepticism about NAMA's ability to work and warned that taxpayers may end up overpaying for assets.
  • NAMA is currently hiring a team of international tax advisers to help with its operations.

Statistics:

  • The National Treasury Management Agency (NTMA) is seeking to appoint a tax adviser to provide advice on setting up NAMA.
  • The Irish banks may be forced to work with NAMA for up to 15 years due to the scale of property-related bad loans.
  • Anglo Irish Bank is set to reveal €3.5 billion in bad debts for the six months up to March.
  • Unemployment is expected to continue to rise, with a top Irish economist warning that while the worst of the crisis may be over, there is still bad news to come in terms of job losses.

Sources:

  • RTE's "The Week In Politics"
  • Interim head of NAMA, Brendan McDonagh, and special advisor, Dr Peter Bacon, are due to appear before the Finance and the Public Service Committee
  • Ulster Bank senior economist, Pat McArdle
  • Fine Gael finance spokesman, Richard Bruton
  • National Treasury Management Agency (NTMA)
  • Anglo Irish Bank

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